JPMorgan bans brokers from trading some cannabis stocks

JPMorgan Chase & Co has said in a letter to brokerage clients that it will not allow them to buy some U.S.-based cannabis company securities starting on Nov. 8, according to a recent Reuters report. The rule covers companies with U.S. operations not currently listed on the Nasdaq, the New York Stock Exchange or the Toronto Stock Exchange with “direct nexus to marijuana-related” activities. “JPMorgan has introduced a framework that is designed to comply with U.S. money laundering laws and regulations by restricting certain activities in the securities of U.S. marijuana related businesses,” according to the letter. The bank will prohibit new purchases and short positions. Liquidation of current positions will be allowed, the letter said. The report does not list any affected stocks by name, but a number of U.S. based companies that serve the legal market in the U.S. trade on the Canadian Securities Exchange and on the OTC bulletin board. Cannabis remains illegal under federal law, although it’s been allowed under local laws in various states.

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