Information Notice has brought clarity to industry's questions over investment into cannabis assets by Guernsey structures

The Information Notice, published in June, sought to clarify whether Guernsey's anti-money laundering legislation would apply to the proceeds of cultivation and production of cannabis for recreational purposes in those countries where it was now deemed lawful.

Speakers at the event, Carey Olsen partner Mark Dunster, counsel Simon Florance and senior associate Luke Sayer explained to the 70-plus audience that while the Information Notice itself did not represent any official legislation or statute it was providing those in Guernsey's finance sector with a clear direction.

"The Information Notice certainly does open the gateway to wider cannabis investment, not just where it is cultivated for medicinal purposes," said Mark.

"It is very helpful and a credit to the Guernsey Government that they listened to those in the finance industry and others that made representations who said there was some confusion with the legislation as to what would be deemed lawful and unlawful in relation to proceeds derived from the cultivation and production of cannabis lawfully in another jurisdiction."

However, both Mark and Simon reiterated the point to the audience that the Information Notice was very clear on the fact that it should not be relied on as legal advice and that the issue had not yet been subject to a court ruling.

"The issuing of the Information Notice was an unprecedented but welcome move," said Simon.

"In this developing area it is important that Guernsey sets the agenda and so the introduction of this policy approach is extremely helpful to the industry. This step involved the Policy & Resources Committee proactively approaching the Law Officers to establish guidance by way of this Information Notice. Of course, there are caveats within the statement but the Information Notice crucially, and actively, says the Drug Trafficking (Bailiwick of Guernsey) Law, 2000 and the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 can be considered as separate legal frameworks. By doing so, they have now stated – with a degree of caveat – that proceeds derived from the cultivation and production of cannabis for recreational purposes in those countries where it is lawful would not be subject to the dual criminality test."

The position taken by the States of Guernsey in relation to cannabis investment follows the approval by the Assembly in June 2019 that businesses can grow and process cannabis in Guernsey for medicinal uses.

Luke, who has advised on licence applications for a range of businesses in this area since then, told the audience that it was an emerging sector but one the States of Guernsey was keen to ensure was developed with a highly regulated environment and abided by similar global standards elsewhere.

"The relatively recent modification to the relevant legislation in Guernsey has presented new opportunities for entities," said Luke.

"That change has been coupled with an open, cooperative and knowledgeable licensing committee. However, the licence process will be novel to almost all interested parties and accordingly needs to be carefully navigated to ensure maximum efficiency and legality."