SEC Reveals Florida Marijuana Investment Fraud

On April 21, 2020, the Securities and Exchange Commission (SEC) filed a Complaint for Injunctive and Other Relief (Complaint) against Steven L. Brickner. According to the SEC, Brickner “falsely represented to prospective investors that he would use their money to purchase the assets of a Colorado-licensed marijuana dispensary network . . .” and ultimately net investors substantial gains through a reverse merger IPO. In reality, Brickner did not own the assets he represented to investors and never filed any necessary documents to complete his promised merger or IPO.

Instead, the SEC alleges that from 2015 to 2019, “Brickner misappropriated approximately $3 million of investor money to fund his lavish lifestyle.” According to the SEC’s press release regarding this matter, Brickner had more than 60 victims, most of whom were retail investors. The SEC alleges that Brickner violated various provisions of the federal securities laws.

As part of the fraud, the SEC explained that Brickner, a 48-year-old Central Florida resident, operated FirstCanna Pharmaceuticals LLC, FirstCanna Financial LLC, FirstCanna Insurance LLC, and High Country Healing Co. LLC. The SEC Complaint highlights that Brickner’s LinkedIn profile and other background information create a façade of past success running a series of venture capital, finance, and other commercial companies in the Tampa, Florida area. However, Hillsborough County court records indicate that Brickner and one of Brickner’s prior ventures, VC Financial Management, LLC, were accused of defrauding a Tampa-based tech startup startup in or around 2014. The SEC Complaint also indicates that Brickner filed for bankruptcy in 2016 and did not file a tax return in 2014 “because he had no taxable income.” This was far from the successful venture capitalist turned entrepreneur Brickner held himself out to be.

According to the Complaint, Brickner made various misrepresentations to investors to induce them to invest and to keep up the appearance that the investments were a success. Such statements include:

Brickner told investors he would use their funds to purchase the assets of a Colorado-licensed marijuana dispensary network;
Bricker provided investors with sales materials that said his company had “mergers and acquisitions in progress,” was “on track to becoming the largest cannabis operation in the United States,” was “currently engaged in the placement of an IPO”; and
Brickner represented that the company was poised for an IPO valuing the company at $2.6 billion.

The SEC alleges that Brickner was able to raise $5.5 million in investor funds through these representations. Nevertheless, the Complaint details Brickner’s true uses for the funds for, among other things, $1.2 million spent on luxury cars, $580,000.00 to pay off his mortgage, $335,000.00 spent at an adult entertainment establishment in Tampa, and $286,000 in ATM and cash withdrawals.

Silver Law Group Specializes in Representing Victims Of Investment Fraud

The SEC has previously issued Investor Alerts to remind investors to be cautious about jumping into “pot stocks” and other marijuana investments without conducting due diligence. Unfortunately, fraudsters like Brickner will continue to capitalize on current events and hard financial times to swindle inexperienced investors out of their hard-earned savings.

These fraudulent sellers are usually unregistered and unlicensed to solicit investor funds and often make offers via cold-call, text message, or social media. Typically, fraudsters offer substantial or guaranteed returns with little to no risk involved.

CBD, cannabis, marijuana or other “pot” companies are a popular sector right now. As the rules and regulations are in flux regarding the legality and sale of these products, legal issues continue to grow. Unfortunately, this popular sector is also littered with con artists claiming to have the next hot company or publicly traded companies exaggerating their financials or prospects. Collectively, the cannabis sector has seen a rise in claims including many violations of the federal securities laws. Silver Law Group represents investors who have been the victim of securities and investment fraud and serve as counsel in federal class actions against cannabis companies.

If you’ve invested in a “pot stock” or other investment and aren’t sure if it’s the real thing, contact us for a confidential consultation. Silver Law Group represents investors in securities and investment fraud cases nationwide to help recover investment losses due to stockbroker or fraudster misconduct and other investment-related wrongdoing. Our attorneys currently represent many investors in marijuana-related litigation and most cases are handled on a contingency fee basis. This means you won’t pay any legal fees unless we are successful. Call us toll free at (800) 975-4345 or email ssilver@silverlaw.com to get in touch.