Investors Warned About Shady Pot Stocks

There are medical marijuana businesses in Canada that have solid plans to grow and sell medical cannabis.

But there appear to be many more with no actual connection to soil-based operations that are nonetheless issuing stock and baiting investors with what might be a risky place to put your cash.

That’s the contention of the Canadian Securities Administrators, which issued a warning about pot stocks yesterday. According to the CSA:

While some have touted medical marijuana as a significant new sector for investment, the CSA has observed a number of small or inactive reporting issuers announcing medical marijuana business plans. In many of these cases, just the announcement of intent to develop a medical marijuana business has resulted in an immediate rise in a company’s stock price. The CSA is concerned investors may face financial harm by purchasing such shares at an inflated price before there is a viable business.

Sounds familiar. There’s a pot gold rush going on. But some outfits don’t really have their hands on the gold.

What’s more, the Canadian Securities Administrators say, it’s not easy to legally grow cannabis in Canada:

Investors should be aware that companies cannot legally conduct a medical marijuana business without a licence from Health Canada, and that there is likely significant time and cost required to obtain such a licence.

The U.S. Securities and Exchange Commission has also alerted investors to potentially shady stock issues.

You can find out which firms have legitimate licenses to grow in Canada here. And, as always, whether your on a back street or on Wall Street, buyer beware.


Understand the importance of honest news ?

So do we.

The past year has been the most arduous of our lives. The Covid-19 pandemic continues to be catastrophic not only to our health - mental and physical - but also to the stability of millions of people. For all of us independent news organizations, it’s no exception.

We’ve covered everything thrown at us this past year and will continue to do so with your support. We’ve always understood the importance of calling out corruption, regardless of political affiliation.

We need your support in this difficult time. Every reader contribution, no matter the amount, makes a difference in allowing our newsroom to bring you the stories that matter, at a time when being informed is more important than ever. Invest with us.

Make a one-time contribution to Alternet All Access, or click here to become a subscriber. Thank you.

Click to donate by check.

DonateDonate by credit card
Donate by Paypal
{{ }}

Don't Sit on the Sidelines of History. Join Alternet All Access and Go Ad-Free. Support Honest Journalism.