As medicinal and recreational uses of marijuana becomes decriminalized throughout U.S. states, the legal marijuana industry has the potential to be one of the fastest-growing industries of all time. However, there is a difference between the potential of an industry and the companies looking to exploit it. The Securities and Exchange Commission (SEC) has been getting complaints from investors regarding marijuana stocks and as a result, they have suspended trading on five of the stocks.

GrowLife, FusionPharm, CannaBusiness Group, Advanced Cannabis Solutions, and Petrotech Oil and Gas all had their shares suspended for questionable financial information and potential illegal activity. The SEC issued a warning: "...For marijuana related companies that are not required to report with the SEC, investors may have limited information about the company's management, products, services, and finances. When publicly-available information is scarce, fraudsters can more easily spread false information about a company, making profits for themselves while creating losses for unsuspecting investors."

If marijuana is ever legalized at the federal level, there will be plenty of legitimate companies for you to invest in. However, most of the over-the-counter marijuana stocks right now offer little or no publicly available, audited information. My job isn't to tell you how to live your life, but it is my job to make you aware of the risks associated with investment opportunities you may be considering.

Ethan Wade, Financial Advisor


(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).