Grow, Gift, Repair

Investment scams don’t skip the Cannabis Industry

According to the complaint, Caputo aimed to launch a recreational cannabis cultivation facility in Holyoke, with plans to lease part of its commercial facility to other cannabis businesses. But Caputo began raising money for the venture “from just about any investor willing to contribute monies,” the complaint said.

Between January 2017 and August 2018, Positronic Farms raised $1.3 million from approximately 40 investors, including people in Massachusetts, Illinois, New Jersey, New York, Michigan, Tennessee, Utah, Vermont and Virginia. Many of the investors were unaccredited and had limited investment experience, the complaint said.

The complaint added that Caputo solicited investors through a variety of means, ranging from press releases and videos to an unnamed “online news portal,” in efforts to offer documents to over 200 prospective investors he met at conferences. The company also hired individuals to sell shares of Positronic Farms, paying sales commissions.

In total, the company solicited over 735 prospective investors, according to the complaint.

Positronic also allegedly started utilizing funds obtained from investors prior to the company raising a minimum $250,000, as outlined in offering documents. Investors were also told that funds would be deposited in an escrow account, but the complaint said Caputo co-mingled these funds with business operation expenses and the funds were used as initial working capital.

Though the complaint says the marijuana company is in the process of applying for a license for the cultivation facility, available documents from the Cannabis Control Commission show that Positronic has not yet submitted a completed application for a license.