I too have had a few inquiries from California Businesses and have told them that they would require Canadian presence to own a .CA domain name.
Funny when one wanted me to be the admin and continue to own the domain. But I refused, as it was not worth for a couple of thousand dollars, to run the risk of the consequences of allowing them to do business under my name, when I had no clue whatsoever, what they would be selling. It was a three char domain and they could have been doing anything with an acronym they come up with.
As Frank said, it would be our moral obligation to do so.