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Wall Street Bank Closes Shop to US Marijuana Stock Activity – Cannabis Hemp Blog

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An American investment bank has warned investors it will soon stop allowing the trading of marijuana companies operating in the US.

The Bank of New York Mellon (BNY Mellon) issued a notice to investors on Monday (September 30), announcing that it will not allow incoming positions or trading of cannabis stocks participating in the US market starting on November 30.

This new mandate only applies to companies with marijuana assets in the US. The bank explained that Canadian companies without any American “operations or distribution” don’t violate the federal Controlled Substances Act.

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The bank said moving forward it will consider reviews on positions that “were subject of an order, transaction or incoming transfer to ensure compliance due to federal laws and regulations.”

BNY Mellon indicated that the ban on trading for these stocks is related to the federal illegality of the drug in the US. Cannabis is still a Schedule I drug in the eyes of the federal government, despite the legalization programs seen at the state level.

So far, 11 states and the District of Columbia have legalized marijuana, both for medical and recreational use. Additionally, 22 other states have legalized medical cannabis products.

“BNY Mellon continues to monitor trends in CRB (cannabis-related business) transactions and may impose additional restrictions or require additional information in the future,” the bank said in its note.

The bank asked investors to hold off on trading or transferring these now disallowed securities. BNY Mellon stated in its warning:

During this time period, up until November 30, the effective date, we encourage you to not trade or transfer in any non-permitted CRB securities and BNY Mellon’s Pershing reserves the right to reject any non-permitted CRB trades or deposits. After November 30, BNY Mellon’s Pershing will no longer accept any non-permitted CRB trades or deposits.

In September, the US cannabis industry received a vote of confidence when the House of Representatives approved the Secure and Fair Enforcement Banking Act of 2019, otherwise known as the SAFE Banking Act.

This bill seeks to create protections for banks and other financial institutions willing to offer banking services to cannabis and hemp companies in the US.

The SAFE Banking Act is now en route to the Senate, were it will most likely face an uphill climb to be approved, according to experts.

“The industry is hanging onto the hope that this would make it a lot easier for a lot of these bigger plays to grow a lot quicker, capture market share and bring over the black market to legal channels,” Nawan Butt, associate portfolio manager Purpose Investments, previously told the Investing News Network.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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The post Wall Street Bank Closes Shop to US Marijuana Stock Activity appeared first on Investing News Network.


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