Colorado Springs Marijuana-Related Business Sees Shares Tumble As Trading Resumes

Advanced Cannabis Solutions Inc., one of five small marijuana-related companies ordered to halt trading since March 5, resumed activity on Thursday, but traders didn’t exactly light its stock on fire. The SEC Commission halted trading March 27 over concerns about whether affiliates or stockholders of Advanced Cannabis Solutions had engaged in illegal distribution of the stock. The shares jumped from $1.90 on Dec. 5 to $48.38 on March 5 during a surge in stock prices of small pot-related companies with shares traded on over-the-counter bulletin boards.

The company, which provides real estate leasing and business consulting services to businesses that sell legal marijuana in Colorado and other states where medical use is allowed, saw its shares soar in February after a series of press releases. One release announced an agreement to provide consulting services to a Canadian investor group involved in opening a large cannabis production operation for the medical marijuana market. Another trumpeted an agreement on a credit line of up to $30 million to acquire real estate it wants to lease to licensed cannabis growers, and a third announced the purchase of a commercial marijuana growing facility in Pueblo County that it plans to expand and lease to licensed operators.

As Advanced Cannabis Solutions resumed trading Thursday, the SEC halted trading in California-based GrowLife Inc., another small company that sells supplies to the legal marijuana industry, because of “concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in GrowLife’s common stock.” Since March 5, the SEC has halted trading in stocks of three other small pot-related companies in California, South Carolina and Texas with stock traded on over-the-counter bulletin boards because of concerns about the “accuracy and adequacy” of information put out about the companies.

The Financial Industry Regulatory Authority warned investors in January about investing in stocks of marijuana-related companies because of volatile prices and the small volume of trading in the shares. The warning noted “the potential for fraud in this arena” and the “risks of investing in thinly traded companies about which little is known.” The alert also cautioned that one unnamed company touted its shares in sponsored Internet links that claimed its stock “could double its price soon.” Advanced Cannabis Solutions lost $472,016 on sales of $455,000 and had assets totaling $473,454 in the third quarter of 2013, the most recent period for which the company has released financial results. The company became public in a merger last summer with Promap, a small Centennial oil-and-gas mapping business.

To read more, visit http://gazette.com/colorado-springs-cannabis-related-business-sees-shares-tumble-as-trading-resumes/article/1518023

Comments are closed.

PLEASE SUBSCRIBE
Get the latest content first.
©Marijuana Stocks Report