SEC Has Warning For Investors Re: Scams On Pot Investing

Dozens of companies listed on the penny stock market have turned themselves into pot stocks in recent months, either through reverse mergers or a simple name change. In general, these companies don’t actually touch marijuana, but claim to be involved in the business of providing infrastructure and services to marijuana businesses or in the business of non-psychoactive CBD oil. Trading of the shares of some of these companies has been extremely volatile. One of men who helped launch the company, a Florida physiotherapist named Stuart Titus, pocketed $7 million in stock sales this year, SEC filings show.

The SEC’s approach to the pot stock game has baffled both promoters and critics of publicly-traded companies that claim to be in the marijuana and hemp industries. Some of the claims the SEC has made against certain companies while temporarily halting their stocks have been alarming, but two weeks after the temporary halts millions of shares of those companies are changing hands again, at a much lower price, without further action by the SEC. In April, for example, the SEC temporarily halted trading in shares of GrowLife, which trade under the ticker PHOT and is one of the most popularly-traded pot stocks in the sector.

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