Marijuana Stocks Pose Investor Risk, Canada Watchdogs Say

CANADA:  Canada’s securities watchdogs are warning investors to be wary of publicly traded companies with ambitions to grow and sell medical marijuana after a rush of at least 13 firms into the industry.

Investors may be at risk if they buy into small or previously inactive stocks seeking to enter the business after Canada moved to commercial production of the drug on April 1, Canadian Securities Administrators said today in a statement. The change was designed to replace home-grown medical marijuana.

Investor interest in marijuana stocks has soared as regulatory changes in Canada and parts of the U.S. have opened the door to legal business opportunities. There about 13 marijuana-related companies on the junior Canadian Securities Exchange, according to James Black, a Vancouver-based vice president of listing development for the exchange. The TSX Venture Exchange lists one stock.

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