3 types of scams to avoid in the cannabis industry

Scams. We’ve seen them for years, especially with the advent of the internet and the ability for anyone to set up websites overnight or establish what appears to be a new company quickly. Today, it seems every new or hot topic that comes into fruition has a number of scams that accompany it and cannabis is no exception.

So what kinds of scams are becoming prevalent and how do you protect yourself and your business from scams aimed at cannabis consumers and industry operators?

Investment Opportunities

Perhaps the most well-known scams currently in the market are in the form of sketchy investment opportunities. Several of these come in the form of stock tips and emails or ads on cannabis-related articles/websites. The US Securities and Exchange Commission has published tips to provide guidance to avoid fraud.

Fraudsters may try to use media coverage about the legalization of marijuana to promote an investment scam. Look out for these signs of fraud:

Unlicensed, unregistered sellers. Unlicensed, unregistered persons commit many of the securities frauds that target individual, Main Street investors. Check out the background, including registration or license status, of anyone recommending or selling an investment, using the free simple search tool on Investor.gov.
Guaranteed returns. If someone promises you a guaranteed high rate of return on your investment, especially along with a claim of no risk, it likely is a fraudulent scheme.
Unsolicited offers. If someone you do not know reaches out to you through social media, an email, a text, or a phone call regarding an investment “opportunity,” it may be part of a scam.

Medical Card Certifications

For each and every state that has passed Medical Marijuana, a new crop of scams for helping patients “avoid the hassle” or “get certified faster” are invading the internet, as well as in print advertising. These programs usually promise that they will provide patients with physician certification quickly and that they provide the easiest route to an approved medical marijuana card.

Unfortunately, many patients, taken in by the promises are quickly fleeced of a fee – estimates up to $300+ – and have received bogus certifications by non-state approved physicians or have received nothing at all in return for their fees. Only the department (DHSS) has the authority to issue cards to qualified patients through the official registry portal. Any other business that claims they can issue patient cards does not have the authority to do so. Physician certifications must be completed by a Missouri licensed physician. Licensed physician information is available through Missouri’s Division of Professional Registration.

Note: The Greenway Publishing Company will never work with any physicians not certified in the state of Missouri or without an honorable track record.

Remember these guidelines:

Only physicians who are licensed and in good standing to practice medicine or osteopathy under Missouri law may certify qualifying medical conditions in patients.
No doctor can “prescribe” medical marijuana. Due to federal law that continues to ban possessing, distributing, selling, and growing marijuana, doctors can only “recommend” medical marijuana. Any doctor offering a medical cannabis “prescription” is not practicing within the law.
There are marijuana doctors and clinics popping up in towns and cities around the state, and it’s not always easy to determine who is legitimate. Ask friends or colleagues who are patient cardholders for recommendations or referrals.
When your doctor conducts your evaluation, make sure that you are receiving a thorough examination. The doctor should inquire about your medical condition and ask you for detailed information about your condition.
If your evaluation feels quick and dirty, then it means that your doctor is probably not complying with the Medical Board’s guidelines. A 5-minute evaluation doesn’t typically represent a legitimate evaluation for a physician’s certification of a patient.
If you’d like to learn more about patient education or to get to know some of the amazing professionals who advocate for reputable physician certification here in Missouri, check out our story on Women to Watch – Dawn Abernathy or a 2020 Greenway Reader Favorite award winner, Dr. Mimi Vo.

Service Providers

Fraudulent practices can show themselves in any type of business within or ancillary to the industry. While there are many reputable service partners in legal firms, banking, security, technology, etc; there are also scammers who want to make quick cash.

With license holders working fast and furious to operationalize, it’s easy to think of outsourcing as a quick and painless solution. Anyone offering to consult with your business should possess legitimate experience in their designated area of expertise.

DO be sure that anyone marketing themselves to you as a partner has a legitimate business and ask for references.
DON’T be pressured into signing contracts quickly – if they’re genuine professionals, they’ll be pleased to offer you a portfolio and references. Everyone has some type of experience before the culmination of the state’s program. Ask for it and check it.
DON’T discount candidates or partners who don’t have a resume solely based in Colorado or California cannabis. While many professionals in Missouri might not have extensive cannabis experience yet, there are a number of business services that can be valuable to business owners that don’t require industry background.
DO be cautious when partnering with people for roles that DO require legal cannabis experience, specifically those that touch the plant at some point in the supply chain.

While none of the above advice or recommendations is new news to many people, it’s important to remember that cannabis is an emerging industry and there are plenty of people who are chasing the elusive “green rush.” Our parents have told us this for years, and it’s sound advice that still rings true today – if it sounds too good to be true, it probably is.

The Missouri medical marijuana industry is a small and supportive group. Don’t hesitate to collaborate with your peers in our state – our program has been successful thus far partially because of our ability to work together and still enjoy individual success.