Investing in your own legal hemp business is easier than ever, but it’s important to take precautions to protect your company from criminals.

Scams. We see them in all industries, particularly with the rise of the web and the ability to establish sites and make brand new businesses overnight. Nowadays, it appears every new trend comes with a range of scams and hemp is no exception. This article will help you identify and avoid a few of the most harmful hemp industry scams.

Hemp Industry Scams Involving Investments

The most well-known scams in the hemp industry involve sketchy investments. Many of them arrive via solicitations here on Linked In, falsified business presentations, trade shows, in personal emails and even via advertisements.

Some fraudsters utilize media coverage surrounding the legalization of hemp to advertise their investment scams. Unlicensed, unregistered persons violate securities laws which target people individually. You can easily have a look at the background, such as registration or permit status of anyone soliciting investments, utilizing the free easy search tool on Investor.gov.

Guaranteed yields. If someone promises you a guaranteed high rate of return in your investment, particularly together with a promise of no downside, it probably is a deceitful scheme. If a person that you have never met reaches you via social networking, an email, a text, or even a telephone call regarding an “investment”, it might be a part of a scam.

Service Company Scams in The Hemp Industry

Fraudulent practices can reveal themselves in any kind of business. Though there are lots of reputable service companies in the hemp industry, there are also scammers who wish to get rich quick.

With legal hemp businesses everywhere, it’s easy to think about outsourcing services. Just remember: Anyone offering to work with your company should have legitimate expertise in their designated field. That proves true for everyone from lawyers to marketers. Talk is super cheap. Make people prove their value to you before you invest.

Do’s and Don’ts

• DO make certain anyone soliciting investments has a business that is registered with the state and request references.
• DON’T be pressured into signing contracts on the fly. If they have integrity, they will be delighted to provide you with a portfolio and references. Everyone has some kind of expertise prior to the culmination of the state’s hemp program. Request track records and assess them carefully.
• DON’T give solicitors a pass on background checks just because they have production experience in Colorado or Oregon. Some of the most harmful scammers come from these states.
• DO be careful when aligning with businesses that require legal cannabis expertise, especially the ones that physically touch the plants and products.
• DON’T stop taking risks. Every industry has scammers, but the world is also full of great opportunities. Cultivate the ones that truly work for you.
• DO invest in yourself. We always make a good investment when we invest in ourselves.
• DON’T pay people you can’t manage. Anyone can promise anything. Getting them to follow through is a different story. Only invest in people you know you can hold accountable.

That might not be fresh news to a lot of folks, but it is important to keep in mind that hemp is still a very new market and a lot of people are pursuing the elusive “green rush”. Our parents have told us for decades, and it still rings true now — when it seems too good to be true, it likely is.