Hours after federal regulators lifted a two-week suspension on trading of Colorado Springs-based Advanced Cannabis stock, trades on another publicly traded marijuana company were suspended.
The U.S. Securities and Exchange Commission suspended until April 24 trading on GrowLife (PHOT), a California company whose penny stock was at 50 cents at the time of the suspension.
News of the latest suspension had traders on edge and sent many marijuana stocks downward — some by as much as 40 percent — while industry watchers wondered whether the SEC was singularly targeting cannabis stocks.
The SEC said it suspended GrowLife trades on the OTCBB because of “potentially manipulative transactions” and questions over the accuracy of public information. Coincidentally, a company executive has sold off more than 500,000 shares of GrowLife since April 3, SEC records show.
The company said in a statement that was cooperating with the SEC and that it was not notified in advance of the sudden suspension.
About 60 publicly traded companies have emerged since medical marijuana was legalized in 20 states, with many companies involved on the industry periphery — infrastructure, real estate and consulting — rather than actually handling the product.
Most are traded on the over-the-counter bulletin board.
Advanced Cannabis, which resumed trading Thursday on the OTC, was down more than 38 percent.
“We’re busy handling day to day business and fielding shareholder/investor calls,” CEO Robert Frichtel said in an e-mail to The Denver Post. “We are pleased, however, that the suspension was lifted and that we continue on with the execution of our business plan.”