UK investors in overseas-listed cannabis stocks are being told by the UK's largest investment platform that they can no longer hold them in their ISAs, self-invested pensions and other portfolios.
Hargreaves Lansdown PLC (LSE:HL.) and AJ Bell PLC (LSE:AJB) have written to clients to let them know that they will need to sell them or move them to another provider by 27 January.
The reason given was that Euroclear, a custodian - or financial trading settlement business, is no longer prepared to support these shares, which include Tilray Inc (NASDAQ:TLRY) and Canopy Growth Corporation (TSX:WEED, NYSE:CGC), meaning Euroclear will remove international cannabis-related securities from the UK's Crest settlement system.
"They are making this change following a review of all international cannabis-related stocks in which they decided they no longer meet the admission criteria to trade. Euroclear’s decision means that after 27 January 2022 you’ll no longer be able to trade or hold Tilray Inc (NASDAQ:TLRY) shares with HL," Hargreaves said in emails to customers who hold relevant shares.
A company spokesman confirmed the news to Proactive, as some investors had questions if it was a legitimate email due to the deadline date being incorrectly listed as '2022'.
A spokesman for rival AJ Bell said it sent a similar communication to customers for the same reasons.
Investors were told in the HL email that they have three options: 1) do nothing and wait until 27 January when HL will sell the shares and put the proceeds into their account, 2) sell the shares themselves until 26 January, or 3) transfer the holding to another provider that is not impacted.
HL said it would waive its normal dealing charges for this transaction.
A spokesperson for HL said: "If the company does not have a license to operate in the UK, then they will be removed."
"London listed shares are not affected."