SEC Ignores Federal Law, Lets Marijuana Biz Offer Stocks
The United States government is helping a California-based company perpetrate a crime by letting it offer public stocks in its marijuana business, even though the drug’s cultivation and sale are both illegal under federal law.
As unbelievable as it may seem, the U.S. Securities and Exchange Commission (SEC), the government agency responsible for enforcing the nation’s securities laws and protecting investors, is permitting a marijuana dealer to register shares. Pot may have been legalized—for medicinal and recreational use—in nearly two dozen states (including the District of Columbia), but it remains illegal under federal law. For a federal agency to approve its official sale is downright insane.
This perplexing news comes from a variety of sources, including a publication, Marijuana Business Daily, that professes to be the No. 1 information resource for the U.S. medical marijuana and retail cannabis industry. In a recent article it celebrates the SEC’s pot endorsement as a magnificent move that “could fuel investor interest in marijuana stocks and encourage dispensaries, cultivation businesses and edibles producers to go public.” These sorts of businesses have refrained from going public, the article points out, in large part because they’re unsure how the SEC would react. Now we know that the feds like the idea.
The cannabis trailblazer is Terra Tech and it’s based in Irvine California. Its vision is to help transform, through innovation, the global population through methods that are both sustainable as well as environmentally friendly. This is language taken straight from its company website. In it Terra Tech also claims to be pioneering the future by integrating the best of the natural world with technology to create sustainable solutions for food production, indoor cultivation, rare and exotic plants and agricultural research and development. It sounds like someone has been smoking something potent.
The SEC rubber stamp indicates that, although marijuana violates federal law, the government isn’t going to prevent investors and businesses from entering the trade, the CEO of Terra Tech said in a local newspaper article. This, in turn, will likely increase the amount of investment capital that will flow into the industry. “This gives them more faith that no one is going to stop the industry’s growth,” the CEO, Derek Peterson, said. He predicts that weed will be completely legal in America in around 5 to 10 years. “Momentum is building in the industry and that has a way of accelerating progress,” the pot CEO said in a separate publication appropriately called High Times.
Those familiar with the SEC may not be surprised at this latest transgression. The fact is that the agency has long been embroiled in scandal and, like many regulatory government entities, is well known for being inept. Judicial Watch has followed the SEC closely and reported on many of its scandals, including the fact that, although it’s charged with policing the nation’s financial industry, it was preoccupied with pornography while the economy crumbled. The country’s financial system collapsed while employees and high-ranking managers at the SEC regularly spent work hours gawking at pornography web sites on their government computers, according to a 2010 agency inspector general investigation.
A year earlier two enforcement officials at the SEC were investigated by the Justice Department for illegal insider trading. The agency attorneys had access to sensitive information relating to agency probes and drew suspicion with unusually frequent stock trades over a two-year period. In 2012 a former assistant inspector general sued the SEC claiming that he was fired for reporting wrongdoing, including security breaches and misconduct among top officers. Before that the SEC came under fire for wasting nearly $557 million on luxurious office space it will never use and lying to cover up the wrongdoing.