By Shariq Khan and Matt Scuffham
(Reuters) – JPMorgan Chase & Co has told prime brokerage clients it will no longer let them buy U.S. cannabis-related securities beginning Nov. 8, according to a letter seen by Reuters.
The move follows similar actions by other prime brokerages, like Credit Suisse, aimed at reducing risk of regulatory action after the fallout from the high-profile collapses of Archegos Capital Management and Greensill Capital earlier in the year.
Cannabis remains illegal under U.S. federal law, even though many states have legalized its medical or recreational use. This represents a legal risk for investment banks working for companies that produce or trade the drug.
(Reporting by Shariq Khan in Bengaluru and Matt Scuffham in New York; editing by Jonathan Oatis)
