The Securities and Exchange Commission is investigating various companies raising funds to invest in marijuana farmers and marijuana consultants who train people how to market the product. This comes on the heels of 20 states legalizing the drug in some way and an increase in sales which is expected to exceed 10 billion in a few years.
The reason the SEC is looking into the financing of these companies is the concern that some of them might not be real businesses earning real moneys.
For example, one company called GrowLife Sciences reported a net loss of $52.2 million in the first half of 2014 on sales of $4.6 million. That does not mean that financing is illegal or that the company has done anything illegal. In addition, no one has been accused of any securities law violations.
The investigations relate to a concern that there may be a gold rush mentality to marijuana which could lead to misinformation to investors.
Jeffrey Newman represents whistleblowers
