SEC INVESTIGATES DEFRAUDING OF OVER 400 CANNABIS INVESTORS | TRICHOMES Morning Buzz

July 31, 2020

In today’s top stories, the Nevada Cannabis Board continues to have its hands full, Maine’s recreational use program might finally get off the ground this year, and if you’re interested in investing in cannabis remember: if it sounds too good to be true, it probably is!

The Morning Buzz presented by TRICHOMES brings you late-breaking news that tells you what’s happening within the cannabis industry.

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First up today, the Nevada Cannabis Board is Investigating Dispensaries for Contaminated Products

The Nevada Cannabis Compliance Board has launched an inspection of three Las Vegas-based dispensaries alleged to have sold contaminated flower.

The flower failed laboratory testing for yeast and mold, as well as several bacteria. The Department of Taxation and the CCB banned the sale of Cherry OG F3 in March. Despite the CCB’s instruction to destroy or return the cannabis to the cultivator, stores continued to sell the product during May, CCB said.

The board opted to investigate three businesses accused of selling nearly 375 grams of tainted product between May 19 and June 29. Those shops are:

• Waveseer of Las Vegas (Jenny’s Dispensary)
• Paradise Wellness Center (Las Vegas ReLeaf)
• Desert Aire Wellness (Sahara Wellness)

There have been no illnesses reported by customers, according to the CCB.

**Next, Maine is Expected to Launch Recreational Cannabis Sales by the End of the Year

MJ Biz Daily reports, Maine’s recreational cannabis program now is expected to launch sales by the end of the year, according to state officials. That would be more than four years after Maine legalized adult use, with the most recent delays stemming from the coronavirus pandemic.

The launch date is based on the first group of growing, processing, and testing facilities operating by the end of September, the Portland Press Herald reported, citing state regulators. That timeline would allow several months for the cannabis to be cultivated, processed and stocked in retail stores.

The new Marijuana Business Factbook projects that Maine’s adult-use cannabis market will reach around $300 million a year within four to five years of launching. The first full year of sales could exceed $100 million.

** Lastly today, the SEC is investigating a fraud case involving 400 investors, a cannabis farm, and a CBD extraction facility

The SEC is accusing six individuals of fraudulently raising $25 million from 400 investors for a part in a supposed cannabis farm and CBD extraction facility.

The money was raised from people across the country between September 2017 and February 2019, according to the complaint filed Tuesday in California federal court.

The accused individuals are all from California or Arizona and their companies were all based in California.

The lawsuit alleges that one group of companies raised about $12.3 million from approximately 226 investors for a farm in Salinas, California. Another group of companies raised about $13.2 million from approximately 211 investors for an extraction facility to produce CBD, also in Salinas.

The lawsuit says the defendants “misled and deceived” investors about how much profit they could expect, “claiming that the investments would generate annual returns of 100% or more.”

The SEC is seeking a permanent injunction blocking the six defendants’ investment activity, plus fines.

**That was today’s buzz! Thanks for listening…for more cannabis news and insights from industry professionals, and a place to discuss these stories and others, visit TRICHOMES.com

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