Prominent Brexiter refuses to back decriminalisation or legalisation of cannabis in UK
Jacob Rees-Mogg’s investment firm is advising one of the highest-profile investors in Canada’s marijuana market.Somerset Capital Management, co-founded by the prominent Brexiter MP, is an adviser to an emerging markets fund established by Purpose Investments.
Purpose Investments has emerged this year as one of the most prominent investors in the Canadian cannabis market. The drug will become legal for recreational use there in October, but it has been legal for medical use since 2001.
Rees-Mogg, chair of the pro-Brexit European Research Group, has refused to back either the decriminalisation or legalisation of cannabis in the UK.
The development comes days after it emerged that Somerset set up a second fund in Ireland after it warned earlier this year about the financial dangers of the sort of hard Brexit favoured by the Conservative MP.
Documents show that Somerset Capital Management is an adviser to the Purpose Emerging Markets Dividend Fund, which invests in sectors including financials, IT and mutual funds in countries such as South Korea, Russia, China and Turkey. The fund does not include investments in the marijuana market.
With legalisation in Canada due in the autumn, funds across North America are looking to cash in.
In January, it was reported that Purpose’s subsidiary Redwood Asset Management had set up Canada’s first actively managed marijuana-themed exchange-traded fund. According to the Purpose website, the Purpose Marijuana Opportunities Fund is close to fully invested.
Rees-Mogg, the MP for North East Somerset, said in an interview last year that he would not be in favour of the legalisation or decriminalisation of cannabis. “With the [cannabis] laws as they currently are, you provide a certain amount of protection for people.
“If you have a system of protection which is saving people you are right to keep the ban in place. The onus of proof is on those who wish to change the law and I don’t think they have managed to establish that the extra risk is worth taking,” he said.
A spokesman for Somerset Capital Management confirmed that it advises an account on behalf of Redwood.
Rees-Mogg has been contacted for comment.
The European Research Group continues to put pressure on the prime minister to adopt a more antagonistic stance towards Brussels as the UK negotiates its exit from the EU.
Disclosures about his business dealings have been used by political opponents to attack Rees-Mogg, who has been working part-time at Somerset Capital in addition to his duties as an MP and has repeatedly dismissed the concerns of those worried about the financial risks of Brexit.
The MP has a stake of more than 15%, according to the register of MPs’ financial interests.
It emerged this week that 21 members at the firm shared £25.3m in the year to the end of March, up from £21.9m the previous year.
Anna McMorrin MP, a leading supporter of the People’s Vote [on the final Brexit deal] campaign, said SRM’s relationship with Purpose raised further questions about Rees-Mogg’s judgment.
“Jacob Rees-Mogg opposes the legalisation of cannabis in the UK, and yet he’s happy to advise a fund set up by a firm which profits from its manufacture overseas. This shows the true hypocrisy of the Brextremists – determined to wreck our European alliances and force a hard Brexit deal on the UK so that they can profit from free trade deals which benefit their own business interests,” she said.
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