Investors come down from cannabis high as legal advice suggests backing drug ventures may break UK law

IG Group is pushing to sell its clients’ shares in cannabis stocks and ETFs 
IG Group is pushing to sell its clients’ shares in cannabis stocks and ETFs 

Europe's largest online trading platform is offloading cannabis stocks after lawyers warned that making profits by dealing in recreational marijuana shares may be a crime.

IG Group is pushing to sell its clients’ shares in cannabis stocks and tracker funds before the end of May after seeking legal advice. Stocks impacted by the decision include Aurora Cannabis, a business popular with young investors, Aphria, one of the world’s largest cannabis producers, and New Age Beverages, the business behind Bob Marley-branded cannabis drinks.

IG Group told clients that its other marijuana-related activities, including a new cannabis index, and CFD trading and spread betting on marijuana stocks, would not be affected. 

The evolving regulatory landscape has unearthed a surge in investor appetite for publicly traded cannabis stocks 
The evolving regulatory landscape has unearthed a surge in investor appetite for publicly traded cannabis stocks 

Law firm Macfarlanes reported 
that UK investors risked “even indirectly” committing money-laundering ­offences under the Proceeds of Crime Act (POCA) 2002 by trading equities of recreational cannabis companies based outside the UK.

IG said it “regularly updates and revises the markets” it offers customers. “IG has seen relatively little demand for these products and made the business decision to withdraw from some stocks,” it said. “We will monitor the situation and may ­revise our position.”

IG’s sudden U-turn follows a surge in investor appetite for publicly-traded cannabis stocks as global legislation around the use of the drug evolves. Canada legalised the use of recreational cannabis last year, while the US has approved marijuana for medicinal or recreational purposes in several states.

The UK has relaxed the rules on ­medicinal cannabis, but the dealing, possession and use of recreational cannabis remains a criminal offence.

IG said there has been an “absence 
of clear rules or guidance,” despite 
the rapid expansion of the global market for cannabis-related stocks, including pharma firms associated with cannabis.  

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