Investing in Canadian MMJ Companies Could Carry Legal Risks

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American investors who funnel money into Canadian medical marijuana companies could run into legal issues with the United States government.

In a recent report by Reuters, several experts warned that investing in Canadian businesses that grow and sell marijuana could be seen as a violation of money laundering and drug trafficking laws.

A spokesman for the Drug Enforcement Administration also said the agency is “most interested in those types of activities.”

One former DEA official told Reuters that, at best, investing in Canadian MMJ companies is “an extremely reckless thing to do.”

Investors in the United States own a sizable number of shares in the handful of publicly traded Canadian companies that grow marijuana, including OrganiGram Holdings, Bedrocan Cannabis and Tweed Marijuana.

Other Canadian MMJ businesses have also raised millions of dollars in capital from U.S. investors and investment firms.