John Binns Writes For Thomson Reuters Discussing Cannabis And Money Laundering

• Published date: 10 May 2022
• Subject Matter: Government, Public Sector, Food, Drugs, Healthcare, Life Sciences, Cannabis & Hemp, Money Laundering, Food and Drugs Law
• Law Firm: BCL Solicitors LLP
• Author: Mr John Binns

Public attitudes toward cannabis have changed in recent years, however the UK law, has lagged, which paired with the requirements imposed by the UK's money laundering laws on the regulated sector may result that the legitimate transactions may be turned away or blocked unnecessarily. BCL partner John Binns writes for Thomson Reuters discussing the challenges the cannabis and cannabidiol industry may present for those charged with identifying and reporting money laundry.

Here is a short extract from the article*. If you wish to read the full article, please visit Thomson Reuters website.

The cannabis and cannabidiol industry can present a problem for those charged with detecting and reporting money laundering, but the risks can be overstated.

Failure of common sense?

Public attitudes toward cannabis have shifted in recent years, to the extent that the international industry in both medicinal and recreational products containing cannabis ' and its non-psychoactive component, cannabidiol (CBD) ' is increasingly recognised as legitimate and lucrative. UK law, despite some relaxation on the medicinal side, has lagged significantly behind, however.

This, paired with the notoriously strict requirements imposed by the UK's money laundering laws on banks and others in the regulated sector, means there is a risk that lawful, legitimate transactions may be turned away or blocked unnecessarily, for no obviously good reason. Is there a way through the legal risks to approach something more like common sense?

Controlled drug prohibitions

The starting point is the prohibitions under the Misuse of Drugs Act 1971 on various acts, including the import, export and supply of controlled drugs, which include cannabis itself and its psychoactive component, tetrahydrocannabinol (THC).

Those prohibitions can be disapplied by exemptions and licences under the Misuse of Drugs Regulations 2001, which:

• define "exempt products" by criteria including a maximum THC level of 1 mg in each product; and
• establish a licensing route via the Home Office, which now enables (subject to stringent restrictions) the prescription of cannabis-based products for medicinal use (CBPMs).

Money laundering laws

The Proceeds of Crime Act 2002 (PoCA) prohibits various acts ' broadly, handling and entering into arrangements in connection with the proceeds of "criminal conduct", which includes conduct overseas that would breach UK law if it occurred there, subject to exceptions including:

• where consent is...