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Law
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However, unlike other more conventional or crypto-based investments, there are strict controls in place based on the criminalisation of the growth and sale of cannabis. This has prevented institutional and retail investors investing without significant risk. The risk comes from uncertainty brought about by the interaction of the Crimes Act 2011 (CA) and the Proceeds of Crime Act 2015 (POCA).
What we have then is a situation where the production and sale of cannabis containing THC, the psychoactive substance in cannabis with a level over 0.3%, in Gibraltar remains illegal as a result of CA. When combined with POCA, any money gained as a result of the growth and sale of cannabis outside the strict regulations, will be considered criminal conduct, resulting in any income being considered “criminal property”. This all seems very clear. However, when we look abroad to make investment in cannabis where the same restrictions do not apply, certainty is not guaranteed.
Legal and regulated
Very simply, conduct deemed illegal in Gibraltar may also be deemed illegal by the Gibraltar authorities if the same conduct takes place abroad, even in a jurisdiction where the activity may be legal and regulated, and thus, any proceeds of said
conduct may be considered the proceeds of crime. This is commonly referred to as the ‘Spanish Bullfighter’ problem – bullfighting is legal in Spain, but illegal in many other countries. If a bullfighter holidays and spends their money in a country where bullfighting is illegal, they
may be guilty of using the proceeds of crime.
Unfortunately, there are few defences baked into the legislation –– and with sentences for producing and selling cannabis ranging from 12 months to life in prison, the downsides are considerable when investing in a jurisdiction where the regulatory regime is different to Gibraltar. Whilst there has been no definitive guidance from the Gibraltar authorities on
what an investor may or may not do in regards to cannabis investment - investors are at real risk of returns being deemed the proceeds of crime and falling foul of the Gibraltar authorities and their anti- money-laundering obligations.
Risk free access into cannabis related products So, whilst the future of cannabis legislation in Gibraltar is uncertain, opportunities remain available to investors.
We have been at the vanguard in seeking to change legislation to enable risk free access into cannabis related products providing that they are legal in the jurisdiction where the activity is being carried out. As a result, the Gibraltar government have been consulting with stakeholders and other interested parties on what steps can be taken to protect incomes from investment overseas without the risk entailed when investing in other jurisdictions.
Facilitating the investment in new and growth sectors has been a speciality for
Gibraltar, where there exists a strong and well-developed financial and legal infrastructure to protect investors. The cannabis economy looks set to ignite and trusted partners are needed to help negotiate the potential pitfalls. Gibraltar is set to be well placed to offer the services and certainty lacking elsewhere to help investors who are keen not to miss the boat when it comes to cannabis investment.
‘Alfie Dingley highlighted the potential benefits of the drug as a treatment for severe epilepsy
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18 Gibraltar International
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