Firefighter lost US$80K in savings to cannabis stocks a famous short-seller warned against — Canadians should take note

At first, the bet appeared to pay off. Banks testified that while on vacation with his wife, he watched the value of his position climb to around US$190,000 (~C$270,000). “It was like I had been watering this plant for weeks, and here it is,” he told the courtroom.

But the gains didn’t last. Banks said CV Sciences shares fell sharply after Andrew Left (pictured above), founder of Citron Research and one of the best-known short-sellers on Wall Street, publicly criticized the company. Even as the stock fell, Banks said he kept believing in the company and held on: “It was like trying to catch a tiger tail. You couldn’t catch up with the thing.”

By the time he sold, Banks was left with about US$30,000 (~C$43,000). He put what remained into another cannabis stock, Namaste Technologies — now known as Lifeist Wellness — hoping to recoup some of his losses. According to court documents, Left’s firm later urged investors to sell Namaste shares, and during a televised interview, Left said he “would keep shorting [the stock] until it goes to 0.” Banks testified he lost about 80% of that second bet, calling the experience “devastating.”

Left eventually faced federal securities fraud charges of his own in a Los Angeles courtroom. Prosecutors alleged he made public statements about more than 20 stocks before taking positions that paid off once markets reacted. Left’s defence argued he never told anyone to buy or sell a specific stock, that his commentary reflected genuine opinions rather than an attempt to manipulate the market and that Banks might have avoided steeper losses had he sold sooner.

Left was eventually convicted on June 1, 2026 for running a market manipulation scheme that brought in more than US$21 million in profits. He could face up to 25 years in prison at his sentencing hearing on August 31, 2026.

While this case unfolded south of the border, it is a warning for Canadians as well.

Why this matters for RRSP and TFSA investors

Canadians who manage their own RRSP can hold individual stocks the same way Banks did through his U.S. retirement account. A self-directed RRSP allows the same kind of concentrated bet — for better or worse.

Short-seller campaigns aren’t strictly a U.S. phenomenon, either. The Canadian Securities Administrators (CSA) has flagged concerns about “abusive” short selling and continues to examine how to police it. Canadian securities law already prohibits market manipulation and misleading statements — but taking action against activist short sellers has historically been hard to prove and rarely done, much as in the U.S.

Banks’s story — losing much of a retirement account to a single concentrated bet — will hit close to home for many Canadian savers who already worry they won’t have enough to retire on. According to BMO’s 2026 Annual Retirement Survey, more than one in three (36%) Canadians say they’re unlikely to reach their retirement savings goal, up from 29% a year earlier.

Concentrated bets like the one Banks took carry more risk because a large share of savings depends on one company’s performance. The Canadian Investment Regulatory Organization (CIRO) notes that a properly diversified portfolio spreads money across different types of investments, industries and regions — so that a loss in one holding can be offset by steadier or better-performing assets elsewhere. Diversification doesn’t eliminate risk, but it can soften the blow when one stock takes an unexpected hit.