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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

The potential dangers behind marijuana stocks

While the 2016 presidential election is still over a year away, one of the issues that will garner attention is whether the use of marijuana should be legalized on a national scale. Indeed, the number of states approving the use of medicinal marijuana is expected to increase, as well as the states expected to approve the recreational use of the drug. These predictions have spawned a new “green” industry where startup companies are taking advantage of the economic opportunities presented.

With that, consumers may be tapped to invest in a purported burgeoning company. However, these companies may not have as much information publicly available, and the accuracy of such information has come into question. The Securities and Exchange Commission (SEC) has halted trading of a number of these companies because of fraudulent statements surrounding the latest innovations in product offerings, growth potential (of a company, not a form of marijuana), and technology to lure unwitting investors. 

Marijuana related investments can come in unregistered offerings such as microcap stocks (low priced stocks offered by small companies) and penny stocks that are touted for their growth potential when, in reality, no such potential exists. Nevertheless, novice investors may be seduced into spending $100 into penny stocks that have no value or potential grow.

While the SEC carries enforcement authority to limit the offering of fraudulent investments, some investors may still be affected. This is where an experienced securities law attorney can help in recovering money lost to unscrupulous brokers and firms. If you have questions about your rights and options, contact a lawyer.

The preceding is not legal advice. 

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