Overseas cannabis stocks hoping to list in London could fall foul of the Proceeds of Crime Act (PoCA).
Following queries from cannabis companies eager to take their shares to the UK, the Financial Conduct Authority (FCA) has explained that money made from recreational cannabis sales in other countries may be deemed ‘criminal property’ here – even if the company in question is based in a jurisdiction where such operations are allowed. Tough news, ostensibly, for North American players dreaming of a City flotation.
The FCA noted that while medicinal cannabis was legalised here two years ago, investment in medicinal cannabis businesses licensed in other countries “remains a legally complex area”. Possessing and supplying cannabis for recreational use isn’t permitted in the UK – and if a pharmaceutical company were to supply cannabis here without the correct Home Office licences, they would be carrying out a criminal offence.
The watchdog added that “we can't assume a person who has been licensed in an overseas country would receive a licence here in the UK”.
For UK-based medicinal cannabis companies and cannabis-oil companies, the situation is more straightforward. They can join the public market here, as long as they have the correct licences. But for overseas-licensed firms, a review will be carried out to confirm that the rules of the PoCA don’t apply. And for companies with overseas activities, it’s more of a grey area; they will need to satisfy the FCA that such activities would be legal, if carried out on UK turf.
