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That minefield is indeed real as evidenced by the SEC recently suspending trading of two industry companies: Eco Science Solutions, Inc; and Holy Grail Company. On April 16, the SEC laid fraud charges against the CEO of CV Sciences Inc (OTC:CVIS).
A more basic truth that may explain the recent bearish industry sentiment perhaps is found in the basic fact that is fundamental to investing – uncertainty and volatility are highly undesired and are detrimental to attracting and retaining capital. Furthermore, the more restrictive and regulated an industry is, the smaller the pool of investors willing to invest may be. On April 13, the Canadian government introduced legislation to pave the way to the legalization of a recreational adult market (Bill C-45). The details of which were in past articles (in particular in our Canadian edition) and can be readily found online. Suffice to say, the legislation proposes several restrictions, regulations, and to many left a great deal of uncertainty. Restrictions plus Regulations plus Uncertainty all at once may not bode well for any sector’s index.