A fool and their money are soon parted, so the saying goes. But rest assured: a person of above-average intelligence, holding a stable job with a solid income is just as capable of making terrible investment decisions.
Last year we saw proof of that in the bitcoin bloodbath. Further back, in the late 1990s, we saw many Kiwis caught up in the promise of investing in Australian ostrich farms. It may sound ridiculous now, but both sounded like great ideas at the time.
Some might say they sounded almost as good as growing marijuana does today.
The thing is that it has never been easier to invest in a start-up business, thanks largely to the advent of crowd-funding, which has given small, hopeful businesses direct access to the wallets of potential investors.
For starters, the entrance requirements to launch a company on a crowd-funding platform are far looser than they are on the stock market.
A spokesperson for the Financial Markets Authority said crowd-funding providers act as gatekeepers, running basic checks on companies seeking to raise money and have first responsibility in terms of ensuring statements are accurate.
However, there are far lower information requirements and there is little or no recourse for investors who are looking to sell their shares. Unlike the stock market, where an investor can cash out when they want to, there is no structure in crowd-funding that allows for investors to buy and sell shares on any given day. If things start to go south, investors may lose a large chunk of their money.
This is one reason why there is always a long list of warnings posted under crowd-funding campaigns, cautioning of the risks involved in investing on these platforms.
Alongside the advent of crowd-funding, we've also seen the rise of digital media, which has made small business investment opportunities more accessible than ever. This change has removed the need for company owners to directly solicit potential backers, or take out expensive print or TV ads.
The strength of this media channel was on full display recently in an ad campaign which has been following me around the internet, tempting me to punch my credit card details into the Collinson Crowdfunding site.
"We've struck oil in Taranaki. Want to invest?" exclaimed the bold typeface in the ad for Greenfern Medicinal Marijuana.
Afterwards, "Invest in a growth industry" and "Last chance to sow seeds of success" completed a persuasive pun-filled triumvirate, appealing to that base desire to make a bit of extra money with minimal effort.
If the numbers are anything to go by, the campaign has worked its socks off for Greenfern. At the time of writing, the company had already raised over $1.7 million from investors, edging towards the maximum goal of $2m.
This follows the crowd-funding success of Hikurangi Cannabis, which has also raised millions in funding from Kiwis looking to hedge a few bets.
And things are only getting started. The avalanche of marijuana company registrations sweeping the Companies Office suggests Kiwis will have no shortage of options to invest in.
Rules of engagement
This green flow will eventually make its way online, and with it will come numerous claims about why this cannabis company has the best intellectual property, the smartest growers or the most impressive network of international partners.
Some of these companies may well end up on crowd-funding sites, but others might not see the need to use these services to raise funds. Why rely on a platform when you can go direct to the source?
Rest assured, however, that we will see more such digital advertising, looking to lure in potential investors.
Asked about advertising investment opportunities, the FMA said any statements made must be accurate, not misleading and able to be substantiated.
These rules have been created specifically to protect Kiwis from being misled by promises that are unlikely to materialise.
However, it's worth asking whether advertising in highly speculative industries shouldn't have tighter controls.
Last year, when the bitcoin hype went out of control, both YouTube and Facebook attempted to put out fires by banning crypto-currency trading ads, on account of the fact that so of them were scams.
This isn't to say that cannabis ads should be banned outright. Nor does it mean that Greenfern, or some other cannabis companies, won't be successful. However, it wouldn't necessarily hurt if firms were obliged to put warnings on such advertisements, noting that this is a highly speculative industry, subject to legislative change, where the rules are still being written.
We've seen regulators step in to protect consumers in other industries, such as tobacco, alcohol and gambling.
That said, even if such rules were applied, targeted digital marketing is incredibly difficult to monitor and can only be addressed if it is flagged by a user who has seen it. And the user who has seen the ad has probably been targeted because of their interest in investing in the industry, meaning the likelihood of a complaint is close to zero.
Not even Bezos knows
The point of this column isn't to question the integrity of cannabis firms that have raised funds on crowd-funding platforms, but the reality is that no one – not even those making the claims – knows what this industry might hold in the future.
To drive this point home, you only need to watch a CNBC news clip from 1999, in which Jeff Bezos refused to make a definitive claim on the likelihood of Amazon evolving into one of the giants of the internet age.
"There are no guarantees," he said, pointing to the lessons from recent history.
"It's very hard to predict. If you go back and look at the companies created by the PC revolution in 1980, you probably wouldn't have predicted the five biggest winners."
Amazon did, of course, go on to become one of the world's most valuable companies and Bezos the richest man, but he didn't claim to know whether any of this would happen. At best, he said, "you can make bets on these things".
Even in the most explosive growth industries, there will be losers. The only question then is how much are you willing to bet on a claim that Bezos wasn't even willing to make about his own company?