DISTRICT OF COLUMBIA: Wall Street cops are scrambling to weed out fraudsters preying on the fledgling world of corporate marijuana as voters legalize the drug in more states and cities.
Publicly traded cannabis businesses are a new vehicle for stock scammers promising big returns. And the number of cases could grow as more regions loosen their marijuana restrictions.
Following Election Day ballot-initiative victories, Alaska, Oregon and the District of Columbia are poised to unlock new opportunities for marijuana companies. They join Colorado and Washington, which have already legalized the drug. In addition, 2016 ballot measures are likely in five states — Arizona, California, Maine, Massachusetts and Nevada — according to the Marijuana Policy Project, a lobbying group. State lawmakers in Rhode Island and Vermont are also considering legalizing cannabis.
Companies selling marijuana products and spinoff businesses associated with its distribution have tapped the public stock markets. They provide an easy target for fraudsters looking to convince gullible investors there is gold in weed.