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Pot Bust: The SEC Issues a Warning on Marijuana-Related Investments

Pot Bust: The SEC Issues a Warning on Marijuana-Related Investments
Photograph by Ted S. Warren/AP Photo

The U.S. Securities and Exchange Commission today warned investors that it’s seeing an increase in complaints about marijuana-related investments as more and more states allow some form of legal use.

The securities watchdog has temporarily suspended shares of five companies that claim to be operating in the cannabis industry over questions about the accuracy of their public statements and potentially illegal sales of securities and market manipulation, according to an SEC notice published today. One of the companies suspended this morning, Denver-based FusionPharm, sells a line of cultivation containers called PharmPods, touted as a “plug and grow” solution for cannabis. Information that FusionPharm disclosed on its assets, revenue, financial statements, business transactions, and current financial condition may be inadequate or inaccurate, according to the SEC’s suspension order, which lasts until May 30. FusionPharm didn’t immediately respond to a telephone message left with its sales and marketing department.