On Friday, the Frankfurt Stock Exchange announced in a circular that on September 28, 2018, the trading of shares, which have something to do with cannabis even remotely, is set. The reason given is that the trading of these shares violates Luxembourg law. The clearing house, Clearstream, based in Luxembourg, a subsidiary of Deutsche Brse AG, will no longer "settle" these shares from that date.
"Settlement" is the process of transferring foreign securities into the German trading system. Since all regional exchanges use Clearstream as a liquidator, all the bad guys are affected!
My opinion:
Deutsche Brse AG goes without resistance in hostage to its own daughter and simply accepts this decision, even though the stock exchanges in question are located in Germany, where the use of medical cannabis is permitted - ie in accordance with the law. It agrees with the compulsory expropriation of thousands, if not tens of thousands of shareholders.
Affected by this directive are not only "small bruises" with market values around or under 100 million euros, but also real heavyweights such as Canopy, Aphira, Aurora, emblem. Even a GW Pharma and a Zynerba are from the end of September are no longer tradable!
GW Pharma and Zynerba are very successful in research on cannabis-based prescription drugs.If one took the legislation in Luxembourg seriously, then probably no pharmaceutical company, which distributes opium-based painkillers, should be traded on German stock exchanges. It would also have all gambling companies, the machine gambling in the program have to be excluded from the settlement, because slot gambling is prohibited in Luxembourg for 40 years! The Uber share would have to be delisted immediately because it violates Luxembourg law! I think there are more examples ...
For me, this scheme is a real farce that has sprung from the ineffective brain of an office stallion. For my legal understanding, it is only important that the stock is compliant with the home exchange! The "liquidation" of a share does not promote the violation of the law in Luxembourg, as cannabis is neither imported nor marketed in Luxembourg.
All parties in Luxembourg are in favor of a release of marijuana for medical purposes:
Parties are open to legalization of cannabis
According to a recent poll, 56 percent of Luxembourgers want a complete legalization of cannabis - not just for medical purposes, but also as a recreational drug.
Of course, opinions of politicians and the people are not laws but if you take it as rigorously as you do now, then Clearstream has been handling shares for years that you would not have been able to liquidate and have probably made millions of profits - "drug money" ,
But I believe that the cheese has not eaten yet, because there is resistance from the securities commercial banks and investors are also going to storm!
What is to be done for existing shareholders of cannabis companies?
Even if "your" company is not on the published list, this is not a license. This company is almost certainly "re-nominated" - this also applies to ETFs.
You now need to find out if your online broker or bank is trading at the company's home market. If so, you may rebook your position to the home exchange (TSX, TSX Venture, CSE, NASDAQ, ASX or LSE). While this will be costly, you can continue to trade the stock after the deadline. Whether this is economical, you have to find out for yourself, because it will depend on the size of your stock position, but should usually be the case.
If your broker can NOT trade on the affected stock exchange, you have two options: You are looking for a new broker who offers to trade on said stock exchanges. Please do not email me with questions about which brokers are and about the cost - I just do not know. I only know that the "Old Fashinoned" Raiffeisen in Austria offers this.