Credit Suisse Halts US Cannabis Stock Transactions, Ends Custodial Service: Report
Credit Suisse Group AG (NYSE:CS) has stopped handling transactions in shares of cannabis companies with U.S. operations and plans to refrain from holding cannabis stocks on behalf of its clients, Reuters reported Wednesday, citing a cannabis company executive and other industry sources.
The Swiss-based lender, which declined to give a statement, was among a handful of banks willing to buy and sell marijuana-related stocks and hold the shares as a custodian for clients in the United States.
While it's not yet clear what impact this decision will have, Reuters reported the move has affected the sale of marijuana stocks in recent weeks.
Abner Kurtin, CEO of cannabis company Ascend Wellness Holdings, Inc., said several "large investors in the space lost their ability to custodian the stocks,” and that the move resulted in a significant sell-off of cannabis stocks.
Reuters pointed out that the value of MSOS, a U.S.-listed cannabis exchange-traded fund, dropped over 20% since early February.
AdvisorShares launched AdvisorShares Pure US Cannabis ETF (NYSE:MSOS) on Sept. 2, to track companies that generate at least half their revenue from the U.S. cannabis and hemp industries.
MSOS Price Action: MSOS shares traded down 1.78% to $41.96 Thursday.
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