A pair of cannabis industry executives defrauded investors of at least $4 million, according to a federal grand jury indictment unsealed Tuesday, which claims the two trotted out a phony CEO who didn’t actually make any business decisions, manipulated the company’s stock price for their own benefit, fraudulently inflated the firm’s financials, and blew a six-figure sum on a luxury vehicle rather than the IPO roadshow for which it was originally intended.
Entrepreneurs banking on NJ Gov. Phil Murphy’s campaign promise to legalize marijuana in the Garden State are starting to feel burned.
Shergoh Alkilani, a real estate developer based in Cliffside Park, said he’s invested roughly $1 million in a pot manufacturing facility in Bergen County — with nothing to show for it and no sense of when it might open, if ever.
He's referring to a substance that's still illegal under federal law, which means that large, federally insured banks don't handle marijuana transactions. Even while touting a potential $75 billion investment opportunity in a research note to investors, the New York bank Cowen Inc. warned that marijuana businesses "may be at risk of federal and/or state criminal prosecution."