Tough Questions Marijuana Investors Should Ask

Ever since the SEC cracked down on marijuana-related investments in 2014, potential investors have been painfully aware of the need to conduct adequate due diligence on the early-stage companies that come courting. Last year’s crisis focused on thinly-traded penny stocks.

This June the private company situation may become especially complex, when changes under SEC Regulation A will permit more widespread crowdfunding. According to Sara Hanks of CrowdCheck, “The intersection of two industries and one school of people is chaos doubled or cubed. Both online early stage fundraising and cannabis are highly regulated while entrepreneurs focus on the business they have to run. It’s a recipe for anarchy.”

On April 20, 2015, Hanks and Alan Hawkins, Executive Director of the Association of Responsible Cannabis Public Companies, co-hosted a session on Risk Management, Best Practices and Due Diligence at the Marijuana Investor Summit.


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