Marijuana investors could see their holdings go up in smoke
That's the warning that Peter Garnry, head of equity strategy at Saxo Bank, is giving.
Just this month we saw US lawmakers pass a farm bill that legalised the cultivation of hemp. That's sent shares in some companies soaring.
As the marijuana stocks have seen their share trade volume skyrocket, their value has risen by between 200 and 1,000 per cent.
But these over-the-counter stocks are often a risky bet.
"The problem is that there’s no regulatory requirement for these companies to issue any financial records, what they make in revenue, what are their profit margins," says Garnry.
So you're dealing with "a high risk investment, you don’t know what you are paying for," and according to Garnry "you are buying, in my opinion, a lottery ticket for the future."
In the last week US regulators decided to allow players in the marijuana sector to hold bank accounts, and permitted them access to other banking services.
The gradual shift towards a looser stance on weed regulation has cheered many who think that the growing acceptance of the plant will see full legalisation in the US.
If the supply of cannabis was made legal, then we would probably expect the drug to be incredibly cheap.
The authors of the 2012 book "Marijuana Legalization" estimated that midgrade joints would be so cheap that businesses might give them away for free in the same way that restaurants give away ketchup sachets.