LONDON (Reuters) - Britain’s markets watchdog opened the door to cannabis company listings on Friday by setting out how it would navigate laws to prevent pocketing proceeds from criminal use of the drug.
The Financial Conduct Authority set out its “approach” to cannabis-related companies interested in a UK listing, pending public consultation on more formal guidance in due course.
The legalisation of cannabis, including for recreational use in Canada and a number of U.S. states, fuelled a speculative “green rush” on Toronto and New York stock markets last year, with analysts expecting some listings in Europe in 2020.
The FCA said that while medicinal cannabis was legalised in Britain in 2018, investment in overseas licensed medicial cannabis companies remains a legally complex area, with a risk of triggering broadly-defined British law that prevent financial gain from criminal activity.
Proceeds from recreational cannabis companies, even when located in countries that have legalised it, are proceeds of crime under the law, it said.
“We can’t assume a person who has been licensed in an overseas country would receive a licence here in the UK as licensing regimes differ globally,” the FCA said.
“UK-based medicinal cannabis companies can be admitted to the Official List, if the company has the appropriate Home Office licences for their activities where they are required,” it added.
The FCA said overseas-licensed medicinal cannabis companies and cannabis oil companies could list in Britain if the proceeds of crime law does not apply, and they meet listing criteria.
Reporting by Huw Jones, editing by Louise Heavens
Our Standards: The Thomson Reuters Trust Principles.