Arizona Journal: “A medical marijuana cultivation facility under construction at the former Golden Eagle warehouse at the west end of Holbrook is expected to employ at least 20 people when operations begin. City Manager Ray Alley explained that he has been working with representatives from Natural Herbal Remedies to issue the proper building permits for the remodeling work taking place inside the building.”
Arizona Public Media: “An advocacy group is appealing terms set by the state Department of Health Services on post-traumatic stress disorder patients seeking medical marijuana for treatment. . . . . Tucson Lawyer Ken Sobel, who represents the Arizona Cannabis Nurses Association, argued Humble had no authority to add those rules, and he filed an appeal to those conditions this week to the Maricopa County Superior Court on behalf of the AZCNA.”
azfamily.com: “Deputies from the Maricopa County Sheriff’s Office have arrested 12 people in a medical marijuana investigation. . . . Detectives have seized $44,317.00, 8 handguns, 55 pounds of medical grade marijuana, 20 pounds of marijuana edibles, 5 vehicles, safes, televisions, computers and tablets from the business and employees’ residences. . . . Arpaio said the suspects opened a shop called Alternative Medicine Group (AMG) and sold medical grade marijuana as a dispensary with no license or authority from the state to do so.”
OC Weekly: “After years of doing nothing to stop dispensaries from coming to town, the police crack down. . . . Aloha was one of the first dispensaries to be raided that afternoon, so the paddy wagon was otherwise empty on the short ride to the Santa Ana Jail. They could consider themselves lucky: Nearly 70 people would be arrested that day, many of whom would complain about cramped, even dangerously overheated conditions in the vehicle and, later, the city jail. Some 24 dispensaries were targeted by Santa Ana cops throughout the afternoon. Seven were already closed when officers arrived, staff at another managed to flee the location before they could be arrested, and 16 others were successfully raided, according to a SAPD list obtained by the Weekly. A total of 68 people were cited as being in violation of the city’s municipal code banning the owning or operating of, as well as volunteering at, a cannabis dispensary.
East Valley Tribune: “Medical marijuana users have no right to grow their own plants once a dispensary moves within 25 miles as the crow flies, a state hearing officers concluded Tuesday. But some rural residents may get to start cultivating again next year. Tammy Eigenheer rejected arguments by Arlin Troutt that the 25-mile rule, part of the original 2010 voter-approved Arizona Medical Marijuana Act, violates his constitutional rights because it allows others living outside the zone to continue to cultivate the drug.”
Phoenix New Times: “Medical-marijuana patients from Arizona and other states could shop legally at as-yet-unopened Nevada dispensaries under a plan being developed by Nevada authorities. Chad Westom, bureau chief of the Nevada Division of Public & Behavioral Health, said on Monday that his state’s new medical-marijuana program will honor Arizona registration cards.”
The following is the text of an August 5, 2014, Securities & Exchange Commission press release:
“The Securities and Exchange Commission today charged four promoters with ties to the Pacific Northwest for manipulating the securities of several microcap companies, including marijuana-related stocks that the agency has warned investors about in recent weeks.
The SEC alleges that the four promoters bought inexpensive shares of thinly traded penny stock companies on the open market and conducted pre-arranged, manipulative matched orders and wash trades to create the illusion of an active market in these stocks. They then sold their shares in coordination with aggressive promotional campaigns that urged investors to buy the stocks because the prices were on the verge of rising substantially. However, these companies had little to no business operations at the time. The promoters reaped more than $2.5 million in illegal profits through their schemes.
Two of the companies manipulated in this case – GrowLife Inc. and Hemp Inc. – claim to be related to the medical marijuana industry. The SEC has issued an investor alert warning about possible scams involving marijuana-related investments, noting that fraudsters often exploit the latest growth industries to lure investors into stock manipulation schemes. Other schemes by these four promoters involved an oil-and-gas company – Riverdale Oil and Gas Corporation – and three other microcap stocks, ISM International, Allied Products Corp, and Aden Solutions.
The SEC was able to unearth the schemes through the work of its recently created Microcap Fraud Task Force.
“Our Microcap Fraud Task Force is taking direct aim at abusive practices and serial violators within the microcap markets like these four promoters seeking to exploit retail investors for personal gain,” said Michael Paley, co-chair of the SEC’s Microcap Fraud Task Force. “In this case, we meticulously reviewed trading records and developed the evidence necessary to connect these four promoters and their coordinated trading efforts.”
The SEC’s complaint filed in federal court in Tacoma, Wash., charges the following individuals:
- Mikhail Galas, a stock promoter who lives in Vancouver, Wash.
- Alexander Hawatmeh, a member of Worthmore Investments LLC, which owns a stock promotion website called stockhaven.com. He formerly lived in Vancouver and currently resides in Lincoln City, Oregon.
- Christopher Mrowca, a stock promoter who operates Money Runners Group LLC, which has an affiliated stock promotion website called MoneyRunnersGroup.com. He lives in Bradenton, Fla.
- Tovy Pustovit, who owns a stock promotion website called Explosive Alerts. He also lives in Vancouver.
In a parallel action, the U.S. Attorney’s Office for the Western District of Washington announced criminal charges against Galas, Hawatmeh, and Mrowca.
According to the SEC’s complaint, GrowLife Inc. was part of a broader online promotion of several marijuana-related stocks in early 2014. Mrowca specifically promoted GrowLife through his Money Runners Group website and predicted that the stock price would nearly double. Mrowca, Galas, and Hawatmeh meanwhile engaged in manipulative trading designed to increase the price and volume of GrowLife stock, and they later sold their shares for illicit profits.
Similarly, the SEC alleges that Hawatmeh, Galas, and Mrowca bought and sold approximately 41.7 million shares of Hemp Inc. in January and February 2014 while the stock was actively promoted on the Internet. For example, one Internet tout on February 6 claimed that Hemp could reach “a REAL Possible Gain of OVER 2900%.” During the promotion, Hawatmeh, Mrowca, and Galas engaged in manipulative wash trades and matched orders to manipulate Hemp’s common stock before selling their shares for illegal gains.
“This was a carefully planned operation by Galas, Hawatmeh, Mrowca, and Pustovit to distort the performance of specific penny stocks as they were simultaneously promoted through social media and the Internet. As the companies’ stock prices increased, these four promoters opportunistically dumped their shares for illicit gains,” said Amelia A. Cottrell, associate director in the SEC’s New York Regional Office.
The SEC’s complaint charges Galas, Hawatmeh, Mrowca and Pustovit with violating antifraud provisions of the federal securities laws. The SEC seeks temporary, preliminary, and permanent injunctions along with an emergency asset freeze, disgorgement, prejudgment interest, financial penalties, and orders barring the promoters from participating in a penny stock offering.
The SEC’s complaint names Nadia Hawatmeh as a relief defendant for the purposes of recovering ill-gotten gains in her brokerage account, which was used by the promoters to conduct some of their manipulative trades.
The SEC’s investigation has been conducted by Michael Paley, Eric M. Schmidt, Mona Akhtar, Joseph Darragh, and Tejal Shah. The case was supervised by Ms. Cottrell, and the litigation will be led by David Stoelting. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Washington, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.
Forbes: “According to a recent poll by the Pew Research Center, 54 percent of American adults support marijuana legalization. That’s around 130 million people. It turns out that some of them are members of the New York Times editorial board, which on Sunday declared that “the federal government should repeal the ban on marijuana.” Given its timing, the paper’s endorsement of legalization is more an indicator of public opinion than a brave stand aimed at changing it.