CannaVEST Corp. (OTCMKTS:CANV) took a sharp turn upward in Wednesday's trading closing at $24.15, up $7.27 (43.07%). However, legal issues may have the hemp producer facing the same fate as GrowLife, Inc. (OTCBB: PHOT).
According to reports, the Law firm of Federman and Sherwood have launched an investigation into whether the company "...violated specific sections of the Securities Exchange Act of 1934 by virtue of the Company’s failure to disclose that its financial statements for the first three (3) quarters of 2013 were allegedly false and misleading and could not be relied upon."
CannaVEST Corp deals in the hemp industry, and saw its stock price jump today after news that it received a Commercial Industrial Hemp Registration from the Colorado Department of Agriculture that permits the growing and possessing of industrial hemp . On the company's website it states, "CannaVest seeks to revitalize and develop the United States industrial hemp industry, which we hope will complement our extensive overseas operations. As hemp legislation and legalization continues on at the state level and at the national level, we anticipate the day that “hemp” is separated from “marijuana” and hemp is once again grown in America."
Even though news of the investigation broke on the same day the company reported the acquisition of the registration, it didn't seem to slow down investors, sending CannaVEST Corp's stock price uphill for the day.
So far, CannaVest has not responded to the allegations. The jump in price is not a milestone, considering the stock was priced at $165.00 earlier this year. There are no reports at this time on whether CannaVEST will face the same fate of GrowLife Inc.
GrowLife Inc. is temporarily suspended from trading by the Securities & Exchange Commission 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.” They are scheduled to return to trading near the end of this month.