United Kingdom: medical cannabis can go public

The UK's financial regulator has authorized UK-based medical cannabis companies to list on the London Stock Exchange (LSE). The situation will be more complicated for foreign companies and access denied to legal recreational cannabis companies.

The Financial Conduct Authority (FCA) acknowledges that the legal position of UK-based medical cannabis and cannabis oil companies is «clear»: they can be admitted to the stock market as long as they have the appropriate government licenses.

Companies operating abroad will have to demonstrate that their activities do not fall under the Proceeds of Crime Act 2002 (PoCA), which applies to activities in the UK and other countries. The company will have to demonstrate that its activities are legal under UK rules, and provide information on its overseas operations and licenses.

«For medical cannabis and cannabis oil companies with overseas operations, the company will need to convince us that their activities would be legal if carried out in the UK,» said the FCA.

«We'll also need to understand the legal basis for the company's overseas activities, for example the nature of local licenses and licenses held by the company.»

Despite the complex position of foreign producers, the fast-growing cannabis industry should celebrate the clarity of the market regulator, which will help businesses secure financing from new investors.

The Financial Conduct Authority said that companies that cultivate and sell cannabis for recreational purposes, even in countries like Canada, where it is legal, In the UK, for example, the UK's leading insurance companies, are unable to register in London, as their business covers overseas activity that would constitute a crime if it took place in the UK.

The UK regulator will soon publish full guidelines.