Stocks of the GrowLife Inc., which manufactures branded gardening supplies for the growing of legal cannabis, were suspended from trading Thursday by the Securities and Exchange Commission.
In their reports, the SEC said that the suspension, which will last until April 29, was based on "questions that have been raised about the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in PHOT’s common stock," Seeking Alpha reported
Urgent: Do You Approve Or Disapprove of President Obama's Job Performance? Vote Now in Urgent Poll
The same day, the law office of Howard G. Smith released a press release
saying they "are investigating potential claims on behalf of investors of GrowLife" concerning "possible violations of federal securities laws, and focuses on GrowLife’s operations and financial condition."
The news comes just days after the company announced they would become the national distributor for the VegaMatrix line of nutrients used for growing marijuana.
"Our partnership brings together two leaders in the legal cannabis industry to support organic growers in clean crop production and maximum yields," Sterling C. Scott, CEO of GrowLife said at the time.
In less than 24 hours, Growlife released a statement.
"We were not notified in advance, but have contacted the SEC to better understand the basis of the complaint. We will fully comply with the SEC's requests for information, and continue business as normal during this temporary suspension," the statement read.
Director and Executive Vice President Robert Hunt has sold more than 500,000 shares of Growlife since April 3, and Eric D. Shevin resigned from the board of directors on April 1 after serving for one year. Traders are keeping their eyes open for developments and clues as to the potential outcome of the suspension.
Seeking Alpha noted that there have been five trading suspensions to date for cannabis companies.
Urgent: Assess Your Heart Attack Risk in Minutes. Click Here.
© 2015 Newsmax. All rights reserved.