Medical Marijuana Update: Bottom Falls Out Of Marijuana Market As Shorts Take Over

Bottom falls out of weed market as shorts take over. A lot of green bushy stuff has turned into red splatter stuff over the past couple of days, with the US medical marijuana market having largely collapsed over the past week. At the heart of the problems facing the sector is the increasing suspicion some of the biggest MMJ players on the OTC may face increasing scrutiny from regulators – and may have plenty to hide.

Growlife (OBB:PHOT, Stock Forum) has been trade-halted by the SEC for “concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in Growlife’s common stock,” leading partners to tear up supply contracts, and investors in other related companies to freak out. Growlife is a $400m market cap company, and with weed prices already bubble-like, that pop was all that was needed to make smaller companies wobble.

Also trade-halted recently was Advanced Cannabis Solutions, for similar reasons, which lost 77% on the resumption of trading. Not helping things was a recent shorters vs pumpers war that broke out on Twitter, which saw stock like AvWorks Aviation (OTO:SPLI, Stock Forum) plunge from a $0.45 52-week high in late March to $0.048 today, a near 90% drop. That fall comes despite the company releasing financials that show it making a solid profit . This has given the anti-penny stock crowd plenty of ammunition to crow I told ya so , but it should be noted that there’s a real industry under the smoky haze of the first movers who started the craze.

Growlife may crumble, and Advanced Cannabis Solutions may have been playing fast and loose, but there are some serious players in the Canadian market that are getting their game together – and they’re being splashed by the bloodletting over the border. If this is a correction, it was the correction the sector needed, to flush out the weak hands and impostors and force everyone else to pick their game up.

To read more, visit http://www.stockhouse.com/news/newswire/2014/04/15/medical-marijuana-update-bottom-falls-out-weed-market-as-shorts-take-over

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