The Bank of Montreal (BMO), the first of Canada’s biggest banks to co-lead a cannabis company financing, puts potential sector deals through an “enhanced due diligence process,” its chief executive says.

Darryl White said Thursday that on top of examining factors such as company quality and reputational risk, Canada’s fourth largest bank also ensures there is no “nexus” to the U.S., where cannabis is illegal under federal law.

BMO casts a “broad net” when assessing a company’s U.S. ties, including criteria such as supplier relationships, manufacturing facilities, and intentions to list shares in the U.S., he added.

“If it passed all those tests, what is the argument against?” White told reporters after the bank’s annual meeting of shareholders.

Canada’s largest banks had largely steered clear of the country’s cannabis sector until January, when BMO co-led a $175 million bought deal financing for licensed producer Canopy Growth Corp.

And in March, the bank’s investment banking subsidiary BMO Nesbitt Burns co-led a $100-million bought deal for marijuana company Cronos Group Inc.

Other Canadian banks, however, continue to study the domestic marijuana industry as the country prepares to legalize the drug for recreational use later this year.

Many of the Big Five banks have significant businesses in the U.S., where cannabis is legal in some states but is considered a schedule 1 drug under federal law.

Toronto-Dominion Bank’s chief executive Bharat Masrani said after the bank’s annual meeting of shareholders recently that it views the legalization for recreational use in Canada as an “important data point” and would consider prospective financings down the road.

TD is examining the industry for risks it would need to mitigate, but any prospective client should not have U.S. exposure, he added.

White said BMO has a “minor” first-mover advantage, but the sector represents a “very small part of our business.”

He also commented on challenges facing the broader Canadian economy, including the beginning of an outflow of investment from Canada to the U.S. in the wake of tax reforms and other factors south of the border.

However, he noted it was not “profound” at this point.

“In real time, we are seeing the early stages of a decision that’s being made to invest, at the margin, in the United States before Canada with some of our customers,” he said.

Ottawa finds itself under increased pressure to respond to Trump’s sweeping tax changes which, among other things, cut the U.S. corporate tax rate from 35% to 21% at the beginning of the year.

Royal Bank’s chief executive Dave McKay recently said a “significant” investment exodus to the U.S. was underway, particularly in the energy and clean-technology sectors.

McKay said capital was already leaving the country “in real time” and urged the federal government to stem the flow.

Thursday’s annual meeting was White’s first as CEO, after his predecessor Bill Downe retired at the end of October.

White told shareholders that he was examining the organization with an eye to “lightening the structure.” Since November, it has been reviewing the bank to make sure all roles are “in line with the market opportunity.”

“We’re mapping literally almost every process and every skill and every piece of work that gets done in the bank against what the desired outcomes are,” he told reporters.

This is a “continuous improvement process” without an end date and he did not have headcount projections.

“I don’t think it will be a heavier bank going forward,” White said.