Sweden’s four main national pension buffer funds – AP1, AP2, AP3 and AP4 – have ruled out investing in cannabis companies after a recommendation from their ethics committee.

The AP Funds Ethics Council, the joint advisory body for the four main buffer funds backing Sweden’s state pension, recommended that the funds exclude cannabis companies from their investment universe.

All four funds – which have combined assets of around SEK1.4trn (€137bn) – have accepted the advice, according to AP4.

AP4 said: “The Ethics Council bases its analysis on the conventions that Sweden has ratified and whether companies in the AP funds’ holdings can be linked to conscious and systematic violations of those conventions.

“The companies Aurora Cannabis, Canopy Growth and Aphria have all confirmed that they sell cannabis for private use and the Ethics Council therefore considers that the companies can be linked to violations of the UN convention on narcotic drugs.”

Because of this, the council advised the funds to exclude these three companies, AP4 said, adding that it and the other three funds had followed this advice.

Sweden has ratified UN conventions on drugs, one of which regulates narcotic drugs and limits their use to medical and scientific purposes.

“The [conventions] today classify cannabis as one of the narcotic drugs that require the strongest control,” AP4 said.

Trading in North American cannabis stocks has been particularly brisk over the past few months, with merger and acquisition activity in the sector making headlines.

Canada’s move to legalise cannabis in October fuelled business hopes for the drug and related products.

Cannabis, or marijuana, is now legal in several US states for recreational use, but still banned under federal law.

US drinks giant Coca-Cola announced back in September that even though it had no interest in marijuana or cannabis, it was paying close attention to the growth of non-psychoactive CBD (cannabidiol) as an ingredient in “functional wellness beverages” around the world.

“The space is evolving quickly,” it said, but added that no decisions had yet been made.