(Reuters)

JPMorgan Chase & Co has told prime brokerage clients it will no longer let them buy United States cannabis-related securities beginning November 8, according to a letter seen by Reuters.

The move follows similar actions by other prime brokerages, like Credit Suisse, aimed at reducing risk of regulatory action after the fallout from the high-profile collapses of Archegos Capital Management and Greensill Capital earlier in the year.

Cannabis remains illegal under US federal law, even though many states have legalised its medical or recreational use. This represents a legal risk for investment banks working for companies that produce or trade the drug.