“CANNABIS INC” IS OPEN FOR BUSINESS, BUT UK INVESTORS MUST WAIT THEIR TURN

On 24th May, Greenberg Traurig published a briefing saying that, with the US cannabis market reported to be worth around $10 billion, sales in Canada expected to reach $6.5 billion by 2020, and the UK having recently decriminalised the use of the drug for medicinal purposes, UK-based investors are eyeing the potential for profit from this new business area.  This Advisory considers what UK criminal laws will apply in this new, complex, and evolving area.  Broadly speaking, it says, medicinal cannabis is now legal in the UK, but in contrast to Canada and some US states, recreational use remains outlawed.  It uses a practical example, in which a wealthy Briton invests in a Canadian company growing cannabis for onward sale for recreational use, the company does well and after a year the shares are sold for a healthy profit, which are then used to buy a holiday home and sports car.  The Advisory concludes that, arguably, both the investor and her investment adviser would have broken UK law.  It says that those investing in companies that expressly state they are involved only in medicinal cannabis projects have nothing to worry about, if such projects would be considered legal if carried out in the UK.  But if the project would fall foul of the UK’s regulatory and licencing framework for medicinal cannabis, UK-based investors run the risk of criminal prosecution.

https://www.gtlaw.com/en/insights/2019/5/roll-up-roll-up-cannabis-inc-is-open-for-business-but-uk-investors-must-wait-their-turn

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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