Big Canadian banks warming to legal marijuana industry

The chief executive of one of Canada’s largest banks said it would weigh financing cannabis companies after legalization takes place later this summer.

TD Bank CEO Bharat Masrani said the Toronto-based financial institution is studying the issue, and any potential clients in the cannabis industry should have a presence only in countries where recreational or medical cannabis remains legal on a federal level, according to the Canadian Press.

Many of Canada’s biggest banks have been steering clear of the marijuana industry to avoid jeopardizing their operations in the United States, where cannabis remains illegal at the federal level.

But recent deals signal a change.

In January, Smiths Falls, Ontario-based Canopy Growth became the first marijuana company in Canada to enlist a major Canadian bank to lead an equity-based funding.

In late March, licensed producer Cronos Group said it was looking to raise up to 100 million Canadian dollars ($78 million) in the second equity financing between one of Canada’s biggest banks and a medical marijuana company.

Both financings involve BMO Capital Markets, a subsidiary of the Bank of Montreal.

Cronos is traded on the TSX Venture Exchange and Nasdaq as CRON; Canopy’s shares are traded on the Toronto Stock Exchange as WEED.

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