SEC Issues Alert On Marijuana Company Investor


The SEC issued an investor alert today regarding marijuana-related investments. The alert noted that the SEC is receiving a growing number of investor complaints relating to  investments in marijuana companies.

Pursuant to those complaints, the commission has issued temporary trading suspensions for the common stock of five different businesses claiming to be involved in the production of marijuana-related products:

  • Fusion Pharm Inc (OTCMKTS:FSPM)
  • Cannabusiness Group (OTCMKTS:CBGI)
  • Growlife Inc (OTCMKTS:PHOT)
  • Advanced Cannabis Solutions, Inc.
  • Petrotech Oil & Gas Inc (OTCMKTS:PTOG)

The Investor letter said trading in these companies was suspended because of questions regarding the validity of publicly-available information about the operations of these businesses. The trading suspensions were also related to reports of potential illegal activity such as unlawful sales of securities and market manipulation in at least two of the companies.

The investor alert also highlighted that those intending to commit fraud often exploit the latest innovation, technology or growth industry such as marijuana to take advantage of naive investors. Furthermore, given many smaller marijuana-related companies are not required to report with the SEC, potential investors will typically have very little reliable information about  management, products, services or finances. Lack of verifiable information makes it easy for fraudsters to spread false positive or negative information about a marijuana company and take advantage of unsuspecting investors.

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