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NextGen Magazine

 
 

SEC Targets Cannabis Company Over Timing Claims About Alzheimer's Treatment

By:
Chris Gaetano
Published Date:
Jan 11, 2021
The Securities and Exchange Commission has imposed a cease-and-desist order against the cannabis firm India Globalization Capital (IGC) due to the company's claim that its cannabis-based pharmaceutical product, an Alzheimer's treatment, would go on sale within months when, in fact, it was not nearly ready, reported MarketWatch. The company, said in 2018 that it had penned a deal to sell the product first in Puerto Rico and then, just a few months later, in 10 U.S. states.

But the SEC said that the Puerto Rico deal fell through as dispensaries (which would apparently be the ones selling this treatment for Alzheimer's) declined to stock the product. IGC, however, never issued a correction to its press release and continued to let investors think the deal it touted so heavily was still on. Meanwhile, it continued to raise money from investors while claiming in its SEC filing that U.S. sales would begin in the second half of 2018—as of 2021, sales have still not begun.

The company itself has been fined $175,000 while the CEO, Ram Makunda, has been fined $35,000. IGC has also agreed to retain a qualified independent compliance consultant to review its corporate governance structure and internal policies, as well as its culture. This consultant is to be given access to key documents to ensure the company's behavior.