Jupiter Wellness

Kurta Law is investigating investor losses on shares of Jupiter Wellness stock. Given the significant risks Jupiter Wellness disclosed in its prospectus, brokerage firms should have fully informed their customers before making a recommendation.

Brokers have a duty to recommend stocks that are not overly risky for their clients, and investors who lost money as a result of broker misconduct may be able to recoup their losses by seeking out FINRA arbitration. Contact a securities attorney with your concerns: (877) 600-0098.

What is Jupiter Wellness?

According to the prospectus, Jupiter Wellness, Inc. (JUPW) was a company developing cannabidiol (CBD) based treatments for skin conditions as well as wellness products. Its products and candidates sought to treat conditions such as burns, eczema, skin cancer, and more.

The company marketed sun and skin care under its CaniSun and CaniSkin brands; it reports that its lead product candidate was called CaniDermRX.

Rebrand as Safety Shot

As of September 14, 2023, Jupiter Wellness rebranded as Safety Shot, Inc. (SHOT) following the acquisition of beverage company Safety Shot. The company’s premier product is an alcohol-detoxifying drink designed to treat hangovers.

What were the Risks Associated with Jupiter Wellness?

Investors should know that Jupiter Wellness disclosed many significant risks associated with its stock in its prospectus.

Notably, Jupiter Wellness states that it had an accumulated deficit of over $9.4 million as of March 31, 2021, with an expectation to continue incurring expenses. The company’s auditors added an opinion to its annual report stating their doubt about its ability to continue as a going concern.

Lack of Therapeutics Products

Jupiter Wellness discloses the following early in its prospectus: “We do not have and may never have any products on the market that have been approved for the treatment of disease.”

Product candidates for the treatment of disease must first be cleared through preclinical and clinical trials, then approved by the FDA. These processes generally take years, and can be delayed by inconclusive or negative results in clinical trials, the discovery of harmful side effects, and other unexpected complications.

Regulation of CBD

Companies that sell products infused with CBD are subject to FDA statements and potential regulations. Changing state and federal laws and regulations may require companies to seek FDA approval for certain of their products.

Jupiter Wellness’ prospectus identifies its CBD-infused sun care products as examples of products that did not previously require FDA approval, but may in the future. Product candidates for the treatment of disease may also be subject to unique FDA rules regarding CBD and therapeutics.

Potential Penny Stock Status

The prospectus states that Jupiter Wellness’ stock may be defined as a penny stock under SEC rules in the future. Penny stocks trade below $5.00 per share and are not listed on a national securities exchange. The company states that its stock may meet these conditions in the future.

Under SEC rules, penny stocks can only be recommended to investors (other than institutional accredited investors) if the broker-dealer provides certain risk disclosures and a special determination of suitability for the investor. Investors must also provide a written agreement for their broker-dealer to facilitate penny stock transactions and a signed acknowledgement that they have read the risk disclosures.

The relative complexity of completing penny stock transactions may deter some investors, potentially harming Jupiter Wellness’ stock.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.

What Can I Do If I Suffered Losses?

If you believe Jupiter Wellness was too risky for your risk profile, consider reaching out to a Kurta Law securities attorney. Our securities attorneys have experience taking on cases of unsuitable investment recommendations and can help earn you a fair settlement through FINRA arbitration. Call (877) 600-0098 or email info@kurtalawfirm.com today.