COLORADO DIVISION OF SECURITIES ISSUES ALERT ON MARIJUANA INVESTMENTS

On Nov. 12, 2015, the Colorado Division of Securities issued an investor alert titled, “Are you an Informed Investor? The Next Big Thing.” The alert addressed the popularity of investments in marijuana, binary options and digital currencies, and how potential investors need to conduct due diligence before making any decisions.

With its focus on issues of market volatility, lack of data, federal illegality and scam artists, the alert’s discussion of marijuana is of particular interest to those hoping to enter the legal marijuana market.

“The secondary market for [legal marijuana] investments is limited and investors may have difficulty recouping their money,” the alert explained. “In some cases, the business may be forced to cease operations by law enforcement, leaving investors with no recourse to recover their funds.”

The alert also identified how forecasted profits are highly speculative because the legal marijuana industry is still an emerging market. In tandem with...

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