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Seizing on the latest enforcement action involving the booming marijuana industry, federal securities regulators sent a broad warning Wednesday about the dangers of investing in an industry that faces an ever-present risk of criminal prosecution under Trump administration policies.

The U.S. Securities and Exchange Commission, announcing charges against a Texas-based investment fund and its founder, issued an alert that cited the Trump administration’s revocation of Obama-era guidance that largely said enforcers would keep their hands off cannabis companies operating legally under state law.

The withdrawal of the so-called “Cole memo”—named after former Deputy Attorney General James Cole, now a partner at Sidley Austin—sent shock waves through the state-legal cannabis industry. The move, initiated by U.S. Attorney General Jeff Sessions, added some new level of regulatory uncertainty just as more states were taking steps to legalize marijuana for medical or recreational use.

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C. Ryan Barber

C. Ryan Barber, based in Washington, covers government affairs and regulatory compliance. Contact him at [email protected]. On Twitter: @cryanbarber

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