Nederland marijuana business ordered to cease all investment solicitations
DENVER — Colorado Securities Commissioner Gerald Rome has issued a cease and desist order to John W. Long, Jr. of Nederland along with his businesses, Green Farms Consulting, LLC and Green Farms Holdings, LLC, for the unauthorized solicitation of investment funds by an unlicensed representative for a marijuana business. According to documents from the Division of Securities, part of the Department of Regulatory Agencies (DORA), Green Farms offered an investment opportunity on Craigslist for at least one month in the summer of 2016. The posted ad presented an offering for “accredited investors” that solicited investments of $1 million for shares in the Colorado recreational and medical marijuana business.
An investigation found that at least one person responded to the ad, and was then provided with documents that sought a minimum $50,000 investment for shares in Green Farms worth $1 each. A promissory note provided with the documents promised an interest rate of 10 percent per year with a return of principal within two years.
The documents provided constituted securities that were neither registered nor exempt from registration with the Division. Further, a representative who was not licensed by the Division contacted the prospective investor. Both conditions were in violation of the Colorado Securities Act.
“The presence of a new, popular, and seemingly lucrative industry like marijuana can be very tempting for investors looking to earn lots of money quickly,” stated Rome. “But along with these offerings comes an extreme risk that is made even more intense based on the fact that we have seen multiple unregistered offerings pop up on sites like Craigslist in the last few years.”
The respondents listed in the order cooperated with the Division during the investigation, and by signing the order have neither admitted nor denied the allegations set forth by the Commissioner. Per the terms of the order, John Long, Jr., Green Farms Consulting, and Green Farms Holdings will immediately cease and desist all offering or selling of unregistered securities, and any otherwise fraudulent or misleading conduct in violation of the Colorado Securities Act.