Prohibition Premium

Premium gas pumpThe legal marijuana movement has put a premium price on a number of companies with cannabis connections. Shares of companies in several marijuana-related businesses have shown huge gains over the past few months in the euphoria following legalization in Colorado and Washington.

Medbox (MDBX) is one example. Shares have nearly quadrupled n 2014 despite a host of accounting and legal red flags and its inability to earn a profit for at least two straight years.

Another company, Enertopia (ENRT), originally was in the renewable energy business. It’s filings say it has two employees and has had no revenue for either 2012 or 2013. On November 4, 2013, however, the company announced a letter of intent to acquire a 51% stake in a medical marijuana business; shares immediately jumped to 5 cents on volumes of more than 200,000 shares — roughly equivalent to the previous six weeks of trading activity. Enertopia shares recently had 15 trading days with volumes above the 200,000 mark, including on January 9, 2014, when more than 1.2 million shares changed hands.

About Douglas Slain

Doug received a JD from Stanford Law School, a MA from the University of Chicago, and a BA from DePauw University (Phi Beta Kappa). After practicing real estate and finance law at then Pillsbury, Madison & Sutro, he founded four national monthly law reporting titles now owned by Thomson-Reuters. He served two consecutive terms as chairman of the American Bar Association’s General Practice section’s Professional Responsibility Committee. Slain was an ABA-appointed rule of law consultant to the Ministry of Economy for the Republic of Latvia as its secured transactions adviser. He taught briefly at Stanford Law School as an adjunct clinical law professor. Slain has been the managing partner of Private Placement Advisors since August 2009. In January 2013 he founded Outliers Network.

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