The Securities and Exchange Commission issued a strong warning today to prospective investors in marijuana based businesses, cautioning those investors against potential fraud.
The investor alert, available here, opens with a direct warning: "[t]he SEC has seen an increase in the number of investor complaints regarding marijuana-related investments" and the government's securities authority has "recently issued temporary trading suspensions for the common stock of five different companies that claim their operations relate to the marijuana industry".
Like any unregistered security, proceed with extreme caution. Despite everyone knowing that if something is too good to be true, it probably is, individuals continuously invest in fraudulent businesses with no likely investment potential. Always contact legal counsel when considering such an investment.