The North American Securities Administrators Association warned investors Monday to be wary of marijuana-related crowdfunding ventures and other risky or potentially fraudulent schemes that could swindle them out of money.
NASAA’s advisory identified several different schemes used by those looking to raise money for a venture or an outright fraud in the growing marijuana investment arena.
It warned that however well-intended, many of these ventures are not close to providing any guarantees.
“Even if marijuana is legal in a jurisdiction, and the promoters have no fraudulent intent, most marijuana-related investment opportunities are in high-risk startup ventures with a significant chance of failure,” the advisory stated.
Moreover, there are potential legal problems involved in marijuana investing, NASAA warned. Some jurisdictions as well as the U.S. government prohibit marijuana use.
NASAA cautioned investors to be aware of laws on the books now, no matter how much the spaces appear to be evolving.