On Friday last week, the FCA issued new guidance on UK listings of cannabis-related businesses. The Financial Times (see https://www.ft.com/content/9fed6fe9-e8fa-4e89-b778-9eca8842b8c9) anticipates that the FCA guidance may clear the way for companies providing products for medical use to float in London. It will be interesting to see what happens in practice.
The FCA has identified three broad categories of cannabis-related businesses:
Recreational cannabis companies: The proceeds from recreational cannabis companies, even when they are located in those jurisdictions that have legalised it, are proceeds of crime under the UK's Proceeds of Crime Act (PoCA). The FCA will not admit the securities of such a company to the Official List.
UK-based medicinal cannabis companies and cannabis oil companies: UK-based medicinal cannabis companies can be admitted to the Official List, if the company has the appropriate Home Office licences for their activities where they are required.
Overseas-licensed medicinal cannabis companies and cannabis oil companies: Overseas-licensed medicinal cannabis companies and cannabis oil companies may be admitted to the Official List, provided the FCA is satisfied that the PoCA does not apply and they otherwise satisfy the criteria for listing. Before they are admitted to the Official List, the FCA will carry out a review of their case where they will need to satisfy us as to the PoCA risk.
A guidance consultation will follow from the FCA although there is no indication of the timing for that.
The FCA guidance does not apply to companies quoted on AIM but the underlying principles are the same.
The FCA explained that "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."