State regulators have ordered a marijuana business owner from Nederland to stop soliciting investments in what they describe as unregistered securities for ventures in recreational and medical pot.
The Colorado Department of Regulatory Agencies says it has issued a cease and desist order for John W. Long Jr., of Nederland, along with his businesses, Green Farms Consulting and Green Farms Holdings.
“The presence of a new, popular and seemingly lucrative industry like marijuana can be very tempting for investors looking to earn lots of money quickly,” Colorado Securities Commissioner Gerald Rome said in a written statement. “But along with these offerings comes an extreme risk that is made even more intense based on the fact that we have seen multiple unregistered offerings pop up on sites like Craigslist in the last few years.”
Nederland marijuana business ordered to cease investment solicitations, which took place over Craigs List. https://t.co/hLgv1RIvvU
— DORA Colorado (@DORAColorado) March 9, 2017
The state’s division of securities claims Green Farms offered an investment opportunity advertised on Craigslist for at least one month in the summer of 2016.
“The posted ad presented an offering for ‘accredited investors’ that solicited investments of $1 million for shares in the Colorado recreational and medical marijuana business,” DORA said in a news release on Thursday.
An investigation by Colorado regulators found that at least one person responded to the ad and was then provided with documents that sought a minimum $50,000 investment for shares in Green Farms worth $1 each. Officials say a promissory note provided with the documents promised an interest rate of 10 percent a year with a return of principal within two years.
The documents provided constituted securities that were neither registered nor exempt from registration with the state, according to DORA, and came from a representative who was not licensed. Both, the state says, are violations of the Colorado Securities Act.