Don’t get burned by marijuana investment scams
1. It’s not exactly corn or wheat, but marijuana is now a cash crop that generates a staggering amount of money in the U.S. each year — $40 billion and growing by one estimate.
2. The feds still classify cannabis as an illegal drug, but medical marijuana use is now permitted in about 20 states and the District of Columbia. Recreational use is legal in Washington and Colorado
3. A Gallup poll released on Tuesday shows that for the first time a clear majority of Americans (58 percent) say the drug should be legalized.
4. Investors are watching this momentum. Some of them believe legal pot sales will be the next “big thing” and they hope to strike it rich by getting in on the ground floor.
5. This “green rush” mentality is custom-made for scammers.
Anytime something has cachet and people are paying attention to it, there’s the chance that people with evil intent will take advantage of that. Money will be made, money will be lost “There will be significant financial returns for people who are smart,” said Brendan Kennedy, CEO of Privateer Holdings, a 3-year-old Seattle company that intends to be a big investor in the legal marijuana industry. It has already raised more than $5 million from investors. “They see the opportunity. They see the inevitability. They see the Berlin Wall of cannabis prohibition being toppled.” Marijuana stocks sound like they may be the next big thing as some states move to legalize the drug, but Herb Weisbaum says you need to watch for signs you're getting scammed. Many investors have made a quick buck betting on legalization via marijuana stocks over the past year,” noted Alyssa Ouster, assistant editor at InvestorPlace.com, in a recent report. “Still others, though, have watched their investment fall flat following a big-time February spike.”