Cannabis Investors Elude Stigma Of Penny Stock

“The presence of cannabis penny stocks that are pumping their stocks is a distraction for companies looking to truly build a sustaining presence in the cannabis market,” said Sam Znaimer, who is raising money for a venture capital fund called Locarno Capital, which will invest exclusively in legal cannabis companies. “That’s not a stigma that the tech industry had to endure.”

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About 30% of Poseidon Asset Management’s hedge fund is invested in cannabis penny stocks, according to Morgan Paxhia, co-founder of the Poseidon Asset Management Hedge Fund in San Francisco. “We’re investing in the ancillary component of cannabis in both public and private holdings,” said Paxhia who attended The Arc View Group Investor Network in Boston. “For example, software to keep track of inventory from seed to sale, equipment suppliers, grow facilities and packaging.”

Well-known cannabis penny stocks include GrowLife ( PHOT ), Cannabis Science (CBIS), GreenGrow (GRNH), Terra Tech (TRTC), Creative Edge Nutrition (FITX) and Advanced Cannabis Solutions (CANN), which was suspended from trading by the SEC until April 9, 2014 pending an investigation. Cannabis Connected Company Temporarily Suspended from Trading By SEC “I know of a few successful penny stock-related hedge funds but it’s difficult given the low liquidity in the sector,” said Timothy Sykes, entrepreneur and penny stock expert in Miami. “As a precaution, many hedge funds discount illiquid penny stock investments so I’m curious how Poseidon is valuing their illiquid investments.”

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