BCL partner John Binns writes for City A.M discussing the FCA’s potentially shifting attitude towards certain types of cannabis industry businesses.
Here’s an extract from the article:
How does the UK’s legal and financial establishment feel about the cannabis industry?
The answer to that has changed significantly over the last few years, to the point that the Financial Conduct Authority (FCA) now contemplates their listing on the London Stock Exchange. But the legal rules around how to do that are far from simple.
First, cannabis remains a controlled drug, as does its main psychoactive ingredient, THC. That means dealings with products containing the cannabis flower, THC or both are generally banned. The Home Office can and does grant licences, however, mostly for medical research, and for growing cannabis (“hemp”) with a low THC content of less than 0.2 per cent.
Second, under the Proceeds of Crime Act (POCA), overseas sales of cannabis products can be classed as “criminal conduct”, if they would be illegal in the UK. This means that dealing with their proceeds can be classed as money laundering (though there is also a system for seeking consent from the National Crime Agency). This helps explain why UK banks have been reluctant to deal with the cannabis industry.
Third, a change in the law in 2018 created a new category of cannabis-based products for medicinal use (CBPMs). These can be authorised by the Medicines and Healthcare products Regulatory Agency (MHRA) or supplied as unlicensed “specials” — though the circumstances of the latter, and in which they can be prescribed, are still very limited.
This article was originally published by City A.M on 24th September 2020. You can read the full version on their website.