Maine CBD executive settles SEC complaint for $390,000

The founder of a Maine-based CBD company will pay more than $390,000 to settle charges by the U.S. Securities and Exchange Commission that he advertised sales of unregistered securities on Craigslist.

The SEC complaint alleges that, beginning in 2014, Richard Greenlaw of Kittery, Maine, raised approximately $500,000 from at least 59 investors by offering securities in 20 CBD businesses that he had formed.

Greenlaw’s CBD firm, NECS, formerly known as New England Cannabis Solutions, and the 19 other businesses he created are also named as defendants in the SEC complaint.

The settlement requires Greenlaw to pay disgorgement and prejudgment interest of $340,142 and a civil penalty of $50,000, according to an SEC statement. The settlement is subject to court approval.

According to the complaint, filed in the U.S. District Court for the District of Maine, Greenlaw sold ownership interests in the companies by posting advertisements on Craigslist.

When prospective investors answered his ads, Greenlaw replied to them with CBD sales materials and documents offering the securities – but there was no registration statement on file or in effect with the SEC for the securities offerings.

Greenlaw owns about 60% of the NECS and is the firm’s only employee, according to the SEC complaint.