Question

How can a publicly-traded company deal in cannabis when it is a Schedule I substance, thus illegal pursuant to the federal statute?

Please use and cite your sources.

Answer 1

Schedule 1 Substances are those which have no proven medical usage but have a high potential for abuse.

Cannabis comes in that category, and thus it is illegal to be involved in growing, marketing, or distributing Cannabis. However within the US, several states have relaxed laws on Marijuana thereby creating opportunities for organizations (Including Publicly Traded companies) to start working in that direction.

Companies dealing with Cannabis that operate in states where it’s legal probably won’t be prosecuted if they’re complying with states laws — even though U.S. attorneys could technically do so. Bricken mentions in Above the Law, “such prosecutions are not likely at the top of their list given the political toxicity of punishing state-sanctioned, voter-approved marijuana businesses.”

Further, Two main types of publicly listed weed companies have cropped up: Those doing business in the U.S. and trading on Canadian exchanges, and those trading on U.S. exchanges but only doing business in Canada (where recreational marijuana is now legal). Investing in the marijuana companies merely doing business in Canada carries even less legal risk.