Pubdate: Thu, 02 Jun 2016
Source: Portland Mercury (OR)
Column: Ask a Pot Lawyer
Copyright: 2016 The Portland Mercury
Author: Vince Sliwoski


I lucked into a few thousand bucks. Can I invest in weed?

YES, BUT probably not in the way you're thinking.

The general rule in this country is that only wealthy people get to 
invest in private companies. These "accredited investors" are allowed 
to invest under an exemption to the Securities and Exchange 
Commission's private offerings rules. If you made $200,000 for each 
of the past few years, or your net worth is north of $1 million, you 
may qualify. Most of us do not qualify, and probably don't fall under 
one of the less common exemptions either. The idea is that most 
people could not weather a financial shellacking and the world is 
filled with crooks.

Not being an accredited investor still allows you to kick back and 
invest in publicly traded companies, which are listed on mainline 
exchanges like the NASDAQ and Dow. You could also buy 
Over-the-Counter (OTC) stocks, but that requires you to enlist a 
brokerage, meet minimum balance requirements, pay fees, etc. As of 
last week, the NASDAQ denied listing to a cannabis social network 
called MassRoots (long story), but that one still sells OTC-so if you 
do some digging, you can probably buy. For now, though, there are no 
weed companies on the large US indices.

So, are there any publicly traded weed companies? The answer is yes: 
Canada began licensing private companies to produce pot for its 
citizens a while back, including a few companies my law firm works 
with. Some of those companies have gone public, and you could buy 
those stocks today. To my knowledge they are all OTC and penny 
stocks, which means you can generally buy shares for less than $5, 
and some of them are probably sketchy pump-and-dump schemes 
(hopefully not the ones we work with). There are lots of great 
stories of people getting rich off penny stocks, but few of them are 
true. I would tread carefully here.

If you don't want to hit the pink sheets for pot stocks, you could 
also find a startup here in Oregon, and try to buy a sliver of the 
business with your $2,000. But I would not recommend this, for a 
couple of reasons: The first is that any startup that will bring you 
in, to any degree, for a mere $2,000 is probably not a good company. 
The second is that many pot companies adding investors don't know 
what they're doing, and are breaking securities laws. However, if the 
startup gives you documents written by a lawyer-including bleak 
language about prison time, fines, and seizure of your property-you 
may be on track.

Ultimately, the options for weed investment are few, and you have to 
really want to invest. There are interesting and very new 
developments with crowdfunding rules that may change this tableau, 
but it may be a while to see whether pot companies give them a look. 
For now, it is probably best to put that $2,000 back in your pocket.
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MAP posted-by: Jay Bergstrom