“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. …”