Investors getting glassy-eyed over the potential riches to be made in the "dot bong era" of legalized pot may want to proceed with caution. The Financial Industry Regulatory Authority issued a warning this week about "potential scams associated with marijuana-related stocks."

FINRA, a securities regulator, says that the nascent medical marijuana industry, which has been celebrated under headlines like "Yes We Cannabis" and "The Audacity of Dope" has attracted fraudsters trying to pass off pump-and-dump stock schemes:

Like many investment scams, pitches to invest in potentially fraudulent marijuana-related companies may arrive in a variety of ways—faxes, email or text message invitations to webinars, infomercials, tweets or blog posts. Regardless of how you first hear about them, the offers almost always contain hallmarks of "pump and dump" ploys. Specifically, fraudsters lure investors with aggressive, optimistic—and potentially false and misleading—statements or information designed to create unwarranted demand for shares of a small, thinly traded company with little or no history of financial success (the pump). Once share prices and volumes reach a peak, the cons behind the scam sell off their shares at a profit, leaving investors with worthless stock (the dump).

Bitcoin, another industry with no shortage of optimistic pitches despite its questionable legality, has also attracted con artists.

Back in June, I went to an extended pitch meeting hosted by the ArcView Investor Network. The group was trying to match ancillary marijuana startups (companies that don't touch the plant itself) with willing Wall Street investors. In response to questions from Gawker, Troy Dayton, Arcview's CEO, told me he was "really glad" to see FINRA's warning.

As public opinion shifts rapidly and laws are changing, the public is rightly exuberant about the prospects for cannabis to be the next great American industry. Unfortunately, some stock scammers are capitalizing on that . . .

This dynamic is not unique to cannabis. We saw the same situation with the "pump and dumps" in the beginning of the biotech boom, green tech boom, and social networking boom. Those industries matured and so will the cannabis industry.

Although FINRA didn't name any names, the agency did offer a few pointed examples, including a company that "promoted its move into the medical cannabis space by issuing more than 30 press releases" in the first half of the year claiming the stock "could double its price SOON," despite a balance sheet that "showed only losses." Spammy and scammy.

FINRA also wagged its finger at the CEO of:

". . . one thinly traded, yet heavily touted, company that purports to be in the medical marijuana business spent nine years in prison for operating one of the largest drug smuggling operations in U.S. history."

Bruce Perlowin, CEO of Las Vegas-based Hemp Inc., who also happens to have spent nine years in prison for drug smuggling, told Bloomberg he was pretty sure FINRA giving him the federal equivalent of a subtweet, when the agency should be touting his expertise.

“That’s not a negative, nor is it something I’ve ever hidden,” Perlowin said in a phone interview. “It means I know marijuana, I know logistics. I ran one of the largest marijuana smuggling operations in the history of the U.S.”

If only all Wall Street operators were so candid about their criminal edge.

h/t Dealbreaker

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[Image via Associated Press]