Canna Law Blog
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For once, the Federal Government is taking the right stance on marijuana businesses by suspending and heavily scrutinizing marijuana penny stock scammers and their trading. The Securities and Exchange Commission (SEC) told Reuters it has suspended trading in five different cannabis micro-cap companies in the past few months. The latest crackdown Friday was against Fusion Pharm Inc., a Denver-based company purportedly selling cultivation systems for marijuana. Of the five companies whose trading was recently suspended by the SEC, the agency said several were targeted for concerns about the accuracy of how they described their operations, and two of them were suspected of illegal activity, including market manipulation and unlawful sales.

Whenever there is a change in laws like what we have seen in Washington and Colorado, the vultures begin to circle and the stock market is no exception. What are the Feds looking for when it comes to popping marijuana stock scams? Typically, incomplete or misleading disclosures from “publicly traded” marijuana companies. Back in August 2013, the Financial Industry Regulatory Authority began noting marijuana penny stock pump and dump schemes and “instances of firms being run by people with criminal records.” Class action lawsuits have been filed against CANNAVest and GrowLife, Inc., and the SEC has suspended trading in GrowLife.

In Publicly Traded Pot Stocks. Watch Out, we noted our own concerns about publicly traded marijuana companies:

We have no opinion about ACS, but we do have an opinion regarding publicly traded pot stocks generally: BE CAREFUL. We are aware of many publicly traded pot companies that are trading at frothy levels that are not well-positioned to compete in the marijuana marketplace. In fact, it would be no exaggeration to state that for every one publicly traded marijuana stocks, there are ten privately held companies that are far more advanced in the market than the publicly traded company.

We noted similar issues earlier in the year in our post, Publicly Traded Cannabis Stocks. Be Careful Out There.

Scammers are bad for our industry and so long as they exist, we intend to call them out.

 

2 responses to “Marijuana Stock Fraud Just Keeps Going And Going”

  1. “LEGALI$ATION” I$ A $KAM AND A KON$PIRACY, it simply puts lipstick on the pig of prohibition. We are already seeing the disastrous effects og legislation in Canada, Colorado and Washington. We must REPEAL PROHIBITION. While it may not be perfect, our last best chance to pass something in the public interest may well be the ‘California Cannabis and Hemp Initiative:2016’.
    Just my 2c.
    Patrick Monk. RN Hospice Case Manager. SF. Ca.
    http://goo.gl/8OUwyv
    *Society of Cannabis Clinicians.
    *American Cannabis Nurses Association.
    **For Identification only.
    https://www.facebook.com/notes/patrick-monk-rn/kannaway-kannabis-skam-/10152351273053468

  2. Yes, this whole MJ pricing issue depends on prohibition, but prohibition is going away. I tell people that legalization does not mean prohibition pricing. Growing weed is not brain surgery. Unless it’s grown indoors there isn’t much of an overhead. The only constant cost is electricity indoors and water if you have to buy it. Lights, containers,& fertilizers are used for multiple crops, so the cost goes down, I tell people to play off these dispensaries against each other, take advantage of the weed bubble in some of our cities. Flash the cash when told a price, tell the people I can get that cheaper at another dispensary/store, and start walking out the door, drop the price or get stuck with your inventory. So anyone investing in MJ stocks is a fool.

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The Canna Law Blog™ is a forum for discussion about the practical aspects of cannabis law and how it impacts those involved in this growing industry. We will provide insight into how canna businesspeople can use the law to their advantage…

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Please be mindful that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, much less lead you to believe that marijuana is legal under federal law.