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Colorado and Washington State Urge Caution When Considering a Marijuana Investment

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The Colorado Division of Securities has issued an investment advisory for three industries: marijuana business, digital currency and ‘binary options,’ a type of stock trade that securities commissioner Gerald Rome said is “closer to gambling” than it is to investing.

In a statement, Rome said: “Marijuana investment opportunities could be particularly susceptible to scams, such as ‘pump-and-dump,’ in which promoters use misinformation to pressure investors to get in on the ‘ground floor’ thereby inflating the company’s share prices before being sold by the promoters.”

Before you consider investing, make sure you understand what these products are, their benefits, and their risks.”

Both Colorado and Washington State released warnings using the same language. Below are the four key points from the section regarding marijuana investments:

Sources:

http://www.westword.com/news/why-colorado-is-warning-people-against-investing-in-marijuana-7350304

http://www.dailycamera.com/boulder-business/ci_29107485/colorado-division-securities-investors-should-be-wary-next

Photo Credit: matchfitskills

 

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