Internationally speaking, the medical cannabis and consumer cannabinoid industry have been developing at a fragmented but steady rate. While markets are still far from maturity, significant legislative and regulatory changes have enabled more businesses to launch into the sector – while also further developing and leveraging various existing expertise.
As a result, global cannabis companies are now becoming more established within their operations. However, the industry still faces a cohort of challenges related to political and social stigma, as well as “bad actors” operating within the space. In turn, it can be difficult for businesses to execute on growth plans, and subsequently investors can be deterred due to the associated “high-risk” nature of the industry.
The cannabis industry is still relatively new, and any changes to legislation and regulation can often take time to implement. This makes the cannabis industry a high-risk sector. Working in association with the Green Bridge Gateway, Shweed is applying proven Due Diligence and Know Your Customer (KYC) processes in order to support the establishment, growth and development of the cannabis industry.
Through the implementation of a robust framework, both cannabis companies and the cannabis industry can demonstrate their support and willingness in fighting financial crime, and subsequently aid in destigmatisation for all market participants. Ultimately, this makes the industry more appealing to investors, whilst also helping to define the regulatory landscape.
Due diligence is a process of reasonable steps, which are carried out to determine the legality/legitimacy, viability and integrity of a company and its associated persons – when establishing and maintaining a business relationship.
Conducting appropriate due diligence allows an investor or company to mitigate risks associated with a business or investment decision, and avoid becoming involved with potentially illegal activities such as money laundering and fraud.
Business owners are commonly mistaken in thinking that due diligence is only required for businesses within the financial services sector; however, it is the responsibility of all businesses – no matter the sector – to ensure compliance with anti-money laundering, sanctions and other legal and regulatory requirements.