This morning in premarket the SEC suspended trading in Growlife (PHOT). PHOT joins CDFT, PTOG, AVNE, and CANN on the list of marijuana stocks that have been suspended by the SEC over the last couple months. CANN reopened for tradingtoday and as I write this it is down 38% at $18.01. (I am currently short CANN.) PHOT will reopen for trading at the market open on Friday, April 25th.
SEC suspension press release (PDF)
SEC suspension order (PDF)
Unlike many of the so-called marijuana stocks PHOT has a real business with meaningful sales and assets and even gross profits (though net losses). This suspension will likely put a damper on marijuana stock hype for days if not weeks.
From the SEC press release:
The Commission temporarily suspended trading in the securities of PHOT because of questions that have been raised about the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in PHOT’s common stock.
The Commission acknowledges FINRA’s assistance in this matter
5 thoughts on “SEC Suspends trading in Growlife $PHOT: Fifth marijuana stock suspension this year”
I just found your site, while in a panic trying to understand what’s taken place. I do think there are many that are in a panic and not mindful of what they are “spewing” out there… many are saying that PHOT will reopen in the Grey Sheets, but I find no indication that this is a forgone conclusion. It appears the VP who was the pre-acquisition owner of the facilities in Colorado all of a sudden wanted to pull out. His are the only trades that seem to have taken place. Adding a little further confusion, the CEO’s wife attempted to sell a large number of shares as well. I can’t help but wonder if he (Hunt) became uncomfortable with the business situation, or if perhaps they both owed the IRS and this was the quickest way to capture cash, or a combination of that scenario, the timing, (enough days for $ to settle before April 15) with the idea they could recoup later. Well, all hell broke lose after… so now what? Would love your insights… Sitting on a $7k loss right now, if this really does hit the fan… and having write my own check to Uncle Sam this weekend, not making for a happy day…
The late filing of all those Form 4s for insider sales was sketchy to say the least. Anyway, opening on the grey sheets is a foregone conclusion. It always happens. It is possible but very unlikely for a stock to leave the grey sheets (MDDD did a few months ago) after an SEC suspension. I expect PHOT to open around .10 and close the first day around .15 and then slowly fade. Look to what CANN has done for clues to what PHOT may do.
CANN isn’t in the Grey’s, how did they manage that? I do see on PHOT that its listed as Pink Grey Market… ouch.
CANN is on the grey sheets: http://www.otcmarkets.com/stock/CANN/quote