In a surprise turn of events, JPMorgan Chase & Company (NYSE: JPM) announced a substantial change in company policy. The multi-national bank is one of the largest in the world and will monitor how the market responds to this development in the near term.

To be perfectly honest, we believe the multi-national financial institution’s attitude toward cannabis to be a positive (although stock prices may not initially reflect), I mean, we had to do is look at the source. We are talking about the bank whose CEO has been calling bitcoin fraud for a long time (although we greatly respect Jaime Dimon).

The development was reported by Reuters which released a memo saying, “J.P. Morgan (JPMS) has introduced a framework that is designed to comply with U.S. money laundering laws and regulations by restricting certain activities in the securities of U.S. Marijuana Related Businesses.”

The restriction applies to any company that has a “direct nexus to marijuana-related activities,” even those that aren’t traded on major exchanges such as the Nasdaq, New York Stock Exchange (NYSE) or Toronto Stock Exchange (TSX).

The announcement comes after the bank told its brokerage clients they will no longer be allowed to purchase cannabis-related stocks and securities starting on November 8th. Last time, a bank of that caliber made a similar move, the cannabis sector came under significant pressure.

Earlier this year, global investment firm Credit Suisse Group told clients earlier this year that it was calling off all transactions involving cannabis-related companies in the United States. That decision by Credit Suisse Group had a significant negative impact on the cannabis sector.

Although we are concerned about how the market will respond to JP Morgan’s decision, we expect any negative impact to be short lived. We believe a number of companies will be impacted by the bank’s decision, we still have a constructive view on the long-term opportunity.

U.S. Cannabis Council CEO Steve Hawkins provided commentary on the development and said, “JPMorgan’s new policy is regressive and at odds with the majority of Americans, who want legal, regulated cannabis. What’s more, it’s self-defeating. The end of federal cannabis prohibition is within site, and the industry is already growing rapidly. I imagine more than a few JPMorgan customers will take issue with being blocked from one of the hottest industries on the market today. JPMorgan is on the wrong side of history on this and will come to regret its decision.”

If you are interested in learning more about the companies to be impacted by “JP Morgan’s decision, please send an email to support@technical420.com with the subject “JP Morgan’s Changes Views On Cannabis investing ” to be added to our distribution list.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.