Jamaica joins global stock markets in bracing for impact of Cannabis Banking Bill

Friday, October 11, 2019

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The Jamaica Stock Exchange (JSE) has joined other stock markets across the globe in bracing for the impact of the Cannabis Banking Bill, which is currently before the US Congress.

Having already been passed by the US House of Representatives on September 25, the SAFE Banking Act, which now goes to the Senate, where if it is passed would lift restrictions in the US on American banks doing business with cannabis companies.

As a result of this move, securities exchanges in Jamaica and around the world are considering the implications for their own economic institutions. At present, foreign-based financial institutions with US banking relationships cannot freely work with legal cannabis businesses.

Jamaica's cannabis industry has been particularly affected, due to the withdrawal of correspondent banking relationship by American correspondent banks.

In an interview with Cannabis Wire, managing director of the Jamaica Stock Exchange (JSE), Marlene Street Forrest stated: “We are watching closely the legislative process [of the SAFE Banking Act], as its passing could have a positive impact on our market and the ease of doing business for cannabis companies.”

According to Street-Forrest, “despite no clear laws to the contrary regarding the listing on the JSE of these companies, the fact that there is this concern, our brokers shy away from taking these companies to market, thereby literally restricting access to equity capital and growth of these companies. To date we have not listed any of these securities, whether they are for companies incorporated in Jamaica, or listed elsewhere and could possibly be cross listed in Jamaica.”

The JSE boss is of the view that the SAFE Banking Act would “result in the growth globally of the cannabis industry”, and could be of “significant help in formalising the industry and creating legitimate job opportunities for families in Jamaica”.

Medical cannabis was legalised for medical use in Jamaica in 2015, and is also allowed for personal and religious use.

In Canada, where cannabis is federally legal for both medical and adult use, the Canadian Securities Exchange (CSE) has been tracking the SAFE Banking Act's progress in Congress. Cannabis Wire reported that last week, CSE's director of listed company services, Barrington Miller told its co-founder, Alyson Martin that in an interview, that when the Act does pass, “it's going to open up this industry, and help show people what cannabis really is, and that's a legitimate business”.

Richard Carleton, CEO of the Canadian Securities Exchange told Cannabis Wire that they are maintaining a “close eye” on cannabis-related legislative developments in the United States, such as the SAFE Banking and STATES Acts, adding that the CSE has worked very closely with cannabis companies, some since their infancy.

“When you think about how restrictive access to banking and other financial services have been,” Carleton said, it's “remarkable” how cannabis businesses have been able to “succeed and grow as they have to date.”

The Canadian Securities Exchange has more listed cannabis companies than any other exchange in the world, Carleton noted. As of September 27, the CSE has 173 entries on their Cannabis Stock List.

After a potential passage of the SAFE Banking Act, Carleton says he'd like to see those companies retained by the CSE even as they may seek to be listed in the United States. He, however, pointed out that even with the potential passage of the SAFE Banking Act through Congress, it's not a given that financial institutions would immediately hop on board to work with the cannabis industry.

“They may, in fact, be waiting for a descheduling of cannabis from the Controlled Substances Act before they jump,” Carleton said. In Australia, where medical cannabis has been legal since 2016, the federal legality of cannabis itself, and not only the subsequent banking issue, is the sticking point.

According to a spokesperson from the Australian Securities Exchange (ASX), the organisation has yet to list any US cannabis businesses “because of their potential illegality under US federal law”. If that law changes, the spokesperson said, ASX “will revisit the issue”.

This story was generated from an original one by Korean-Canadian journalist ,Yeji Lee of cannabiswire.com


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