(Alliance News) - The UK's Financial Conduct Authority on Friday said that recreational cannabis companies are not allowed to list in London, even if personal use of the drug is legal where the firm operates.
The regulator set out provisional advice, ahead of a guidance consultation "which will follow in due course".
"While medicinal cannabis was legalised in the UK in 2018, investment in overseas-licensed medicinal cannabis businesses remains a legally complex area. We consider that there remains a risk that the proceeds from overseas medicinal cannabis business may constitute 'criminal property' for the purpose of the Proceeds of Crime Act 2002. This includes where the company possesses a licence issued by an overseas medicines or pharmaceuticals licensing authority," the FCA said.
"The proceeds from recreational cannabis companies, even when they are located in those jurisdictions that have legalised it, are proceeds of crime under PoCA. We would therefore not admit the securities of such a company to the official list."
UK-based medicinal cannabis or cannabis oil companies can be admitted to the official list, the FCA clarified, but only with an appropriate Home Office licence for their activities.
For overseas-based medicinal cannabis or cannabis oil firms however, the FCA said it will review the case and the company can list, providing it does breach the Proceeds of Crime Act 2002.
"For medicinal cannabis and cannabis oil companies with overseas activities, the company will need to satisfy us that their activities would be legal if carried out in the UK. We will also need to understand the legal basis of the company's overseas activities, for example the nature of the local licensing and the licences the company holds," the FCA added.
Back in September last year, Highlands Natural Resources PLC became Zoetic International PLC as it shifted its primary focus to cannabidiol operations from natural resources.
By Eric Cunha; ericcunha@alliancenews.com
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