Scammers looking to cash in on marijuana boom
SEATTLE -- The marijuana business in the United States is worth $40 billion, and as states like Washington and Colorado decriminalize the personal use of pot, investors hope to cash in.
Unfortunately, so do scammers, who are ready to pitch their bogus or worthless "investment opportunities."
People's attitude about pot is changing -- Tuesday, a new Gallup poll showed for the first time that a majority of Americans -- 58 percent -- said cannabis should be legalized.
Investors are watching this momentum and some of them believe legal pot sales will be the next "big thing" and they want get in on the ground floor.
This "green rush" mentality is custom-made for scammers, who promise guaranteed returns with very low risk.
"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," said Bill Beatty, Director of the securities division in the Washington State Department of Financial Institutions.
Like many investment scams, pitches for bogus marijuana investment opportunities arrive in a variety of ways -- email, tweets, blog posts, faxes, webinars, infomercials and invitations to attend a presentation in your area.
It's easy to get burned when you act solely on a stock tip you hear from a source you don't know.
You can already buy medical marijuana stocks through the over-the-counter market. Federal regulators caution that there are generally no minimum standards a company must meet to have its securities quoted in the OTC market and many of these stocks are not liquid and difficult to resell.
Remember, when it comes to marijuana, even legitimate investments are risky. This is uncharted territory and cannabis is still considered an illegal drug by the federal government, which could decide to shut down a company at any time.