Marijuana-Related Investments and Fraud

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Since 2018, retail sales of marijuana from licensed dealers has been legal in Massachusetts. Fraudsters can exploit the industry to entice unsuspecting investors. If you’re looking to invest in a marijuana-related business, use these warnings to avoid fraudulent or illegal transactions.

1. Marijuana sales are still illegal under federal law, even if they are legal in Massachusetts.
2. Because of the legal uncertainty, federal and state chartered banks may avoid working with marijuana-related businesses. Specifically, they may refuse to accept deposits from marijuana and marijuana-related sales, or they may refuse to offer loans to marijuana-related businesses.
3. These laws are constantly changing, and they carry complex requirements for marijuana-related businesses in Massachusetts.
4. If you receive an unsolicited investment offer, contact us to check the investment’s registration status. It’s illegal for anyone to solicit or sell unregistered securities in Massachusetts.
5. Confirm the sellers and check their backgrounds, including registration or license status. Fraudulent investments often originate from unlicensed, unregistered sellers. Fraudsters move from one scheme to another, and they may have a shady history.
6. Ask for financial information and supporting documentation from the sellers. If they promise guaranteed returns, implausibly high rates of return, or unreasonable growth potential, back out of the deal. Some fraudulent companies provide fictitious information and documents with an offer.

For more information, or to confirm a potential seller’s registration status in Massachusetts, contact the Cannabis Control Commission.