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BUZZ-Fitch sees Canadian banks' appetite for cannabis to remain muted

** Ratings agency Fitch expects banks to remain cautious about cannabis firms due to substantial risks, including increased compliance considerations and cross-border money laundering

** The concerns are likely to outweigh lending and advisory opportunities in the cannabis industry for banks in Canada and in the U.S. over the medium term, Fitch says

** Canada's cannabis companies are facing a host of problems, with deepening losses and regulatory scrutiny

** Despite making legal inroads in the U.S., cannabis which is still classified as a Schedule I controlled substance by the U.S. FDA - alongside heroin, LSD, and ecstasy - makes it tough for pot companies to get traditional banking services

** However, Canadian banks' cautious approach to the cannabis industry is a positive from a credit perspective - Fitch

** Even the unlikely passage of proposed U.S. legislation to exempt cannabis from the Controlled Substance Act in states where it is legal may not provide sufficient legal certainty to prompt scaled banking in either the U.S. or Canada - Fitch (Reporting by Shanti S Nair in Bengaluru)