SEC Accuses Cannabis CFO of $4.2M Round-Trip Accounting Scheme: Industry Lessons

The U.S. Securities and Exchange Commission (SEC) has filed charges against the former CFO of Acreage Holdings, Glen Leibowitz, alleging his involvement in a $4.2 million round-trip transaction designed to manipulate the company’s year-end cash balance. This case underscores the increasing regulatory scrutiny cannabis companies face, particularly as they grapple with complex financial reporting obligations, banking restrictions, and compliance challenges.

Breaking Down the Allegations

According to the SEC, Leibowitz orchestrated a deceptive cash exchange between Acreage Holdings and a related non-profit entity. The transaction, structured as a short-term loan, allegedly served no real economic purpose other than artificially inflating Acreage’s reported cash balance by over 15% at the end of 2019. The SEC further claims that Leibowitz misrepresented the transaction to auditors and directed accountants to falsify journal entries, concealing the true nature of the deal.

Acreage’s financial standing was particularly significant at the time, as investors closely monitored cannabis companies’ cash reserves due to industry-wide challenges in securing traditional financing. The SEC asserts that this fraudulent maneuver was aimed at misleading investors and improving Acreage’s financial appearance.

Implications for the Cannabis Sector

This enforcement action highlights the SEC’s heightened focus on financial transparency in the cannabis industry. In January 2025, Acreage agreed to settle the charges by paying a $225,000 civil penalty, without admitting or denying the SEC’s findings. This case serves as a cautionary tale for cannabis companies, emphasizing the necessity of maintaining rigorous financial oversight to mitigate legal and regulatory risks.

How Anderson P.C. Supports Cannabis Businesses

At Anderson P.C., we provide legal counsel to cannabis companies navigating SEC enforcement actions, regulatory compliance, and financial best practices. Our expertise in securities enforcement and government investigations allows us to assist cannabis businesses with:

• Regulatory Compliance: Ensuring companies adhere to SEC, FINRA, and other financial reporting requirements.

• Internal Audits & Investigations: Conducting in-depth financial reviews to identify potential compliance risks before they escalate.

• Legal Defense: Representing cannabis companies and executives facing SEC inquiries or enforcement proceedings.

• Corporate Governance & Risk Management: Advising leadership on structuring internal controls and governance frameworks to prevent regulatory pitfalls.

What’s Next for Cannabis Companies?

As the cannabis sector continues its rapid growth, regulatory scrutiny will follow suit. Compliance with securities laws is essential for maintaining investor trust and avoiding enforcement actions. Companies should prioritize strong financial controls, conduct regular audits, and engage experienced legal counsel when navigating complex regulatory landscapes.

For cannabis companies seeking strategic legal support, Anderson P.C. stands ready to assist. Reach out today to explore how we can help safeguard your business and ensure full regulatory compliance.

For legal inquiries or assistance, contact us at +1 202-787-5796.

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Anderson P.C. is a boutique law firm dedicated to defending clients in government investigations and securities enforcement actions initiated by the SEC, FINRA, DOJ, and other regulatory bodies. We provide focused, strategic counsel and regulatory guidance across the full spectrum of federal laws and regulations affecting broker-dealers, investment advisers, banks, asset managers, private funds, public companies, senior executives, and digital assets. Our deep expertise allows us to navigate complex legal challenges and deliver results-driven solutions tailored to our clients' unique needs.

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