Norway’s Sovereign Wealth Mega-Fund Divests from Cannabis

$1 trillion GPFG received heavy pushback from narcotics association.

Despite successful returns, the world’s largest sovereign wealth fund will divest from five cannabis companies, following pressure from the Norwegian Narcotic Officers Association.

Oslo’s $1 trillion dollar Government Pension Fund Global (GPFG) held about $103 million in Canopy Growth, Aphria, Aroura Cannabis, Scotts Miracle-Gro, and Insys Therapeutics at the end of 2018. The first three entered the fund’s portfolio last year. Scotts and Insys showed up in 2007 and 2015, respectively. Norway originally bought marijuana-linked stocks because it noticed a spike in public interest in cannabis-related investments.

By early March, the stocks generated a $50.8 million profit, according to Norwegian newspaper Dagens Naerinsliv, which first reported the news. That didn’t change the opinion of the narcotics association, a non-profit organization that has reportedly criticized the wealth fund’s investment in the sector.

The agency claims that by investing in marijuana, which is illegal for recreational use in Norway, the GPFG was negating the work it had done against drug addiction. It said some of the businesses were manufacturing products for medicinal use, which is OK in the nation, as well as recreational use.

According to Thomas Sevang, the heavily oil-invested fund’s head of communications, the morality of these marijuana investments had been previously discussed with the government’s Council on Ethics prior to implementation.

Sevang told CIO the divestment was done after a full assessment, but the fund would not provide any information regarding those details due to market sensitivity. He also said it will no longer invest in companies linked to or have exposure to the cannabis industry.

The Norwegian Narcotic Officers Association was unable to be reached for comment.

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