Crowdfunding Cannabis & herbalfund
May 10th, 2016
News, Top Story
The cannabis industry could reach $35 billion by 2020, according to GreenWave Advisors, but many start-ups face hurdles raising capital and investors have limited opportunities.
The most popular way to raise private capital for the past 80 years has been through accredited investor offerings. Using platforms like Cannafundr, cannabis investors making over $200,000 per year or with at least $1 million in liquid assets can view investment opportunities and purchase stock in private companies before they go public. These transactions still account for the vast majority of market when it comes to raising private capital.
In recent years, there have been a number of changes to these rules aimed at opening up the market for private investments. The first major change made back in 2013 was Rule 506(c), which is an exemption that allows general solicitation for investments. The catch is that companies selling stock under the new rule must take “reasonable steps” to verify that investors are accredited rather than simply taking them at their word.
herbalfund connects cannabis start-ups with investors under this new rule, opening the market to privately held opportunities. For investors, this means that they have easier access to companies that can reach out to them. For companies, this means that they can proactively reach out to investors and solicit them rather than waiting on the sidelines. The process occurs entirely online, which makes it easy to invest and track investments over time.
“At herbalfund, we saw the global cannabis market developing with creativity, excitement and great opportunities, we realized that there was another private investing revolution of crowdfunding taking place, and that intersecting these two has the potential to create huge success,” said herbalfund’s Avi Cohen.
herbalfund is currently adding new projects and seeking more before officially launching in July for funding. The platform will be open as of May for registration and uploading of projects and updates before the funding process begins.
Title IV of the JOBS Act – also known as the Crowdfunding Act – is the second major change that hit the market. Under these new Reg A+ rules passed in June of 2015, start-ups can raise up to $50 million from the general public. While it still costs start-ups $50-100,000 to audit their financial statements and make regulatory filings, the process is significantly cheaper than a reverse merger, SB-1 transaction, or traditional IPO that can cost millions of dollars.
Med-X Inc., a provider of all-natural products through its patient cooperative, became one of the first companies to raise capital through Reg A+ back in December of 2015. The company used the StartEngine platform to raise $15 million in capital through the sale of 25 million shares of common stock at $0.60 per share with a minimum investment of 700 shares – or $420 in a nod to the industry that it operates within.
Investors interested in the cannabis industry may want to take a closer look at crowdfunding opportunities available on platforms like herbalfund. As more companies pursue this fundraising path, investors could see better opportunities in the private market than the public market, while companies could realize significant cost savings.
This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.
Follow Us on Social Media
About CFN Media Group
CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.
Disclaimer: Matters discussed on this website contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time-to-time have a position in the securities mentioned herein and will increase or decrease such positions without notice. The Information contains forward-looking statements, i.e. statements or discussions that constitute predictions, expectations, beliefs, plans, estimates, or projections as indicated by such words as "expects", "will", "anticipates", and "estimates"; therefore, you should proceed with extreme caution in relying upon such statements and conduct a full investigation of the Information and the Profiled Issuer as well as any such forward-looking statements. Any forward looking statements we make in the Information are limited to the time period in which they are made, and we do not undertake to update forward looking statements that may change at any time; The Information is presented only as a brief "snapshot" of the Profiled Issuer and should only be used, at most, and if at all, as a starting point for you to conduct a thorough investigation of the Profiled Issuer and its securities and to consult your financial, legal or other adviser(s) and avail yourself of the filings and information that may be accessed at www.sec.gov, www.pinksheets.com, www.otcmarkets.com or other electronic sources, including: (a) reviewing SEC periodic reports (Forms 10-Q and 10-K), reports of material events (Form 8-K), insider reports (Forms 3, 4, 5 and Schedule 13D); (b) reviewing Information and Disclosure Statements and unaudited financial reports filed with the Pink Sheets or www.otcmarkets.com; (c) obtaining and reviewing publicly available information contained in commonlyknown search engines such as Google; and (d) consulting investment guides at www.sec.gov and www.finra.com. You should always be cognizant that the Profiled Issuers may not be current in their reporting obligations with the SEC and OTCMarkets and/or have negative signs at www.otcmarkets.com (See section below titled "Risks Related to the Profiled Issuers, which provides additional information pertaining thereto). For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity-based compensation in the companies it writes about, or a combination of the two. For full disclosure, please visit: https://www.cannabisfn.com/legal-disclaimer/. A short time after we acquire the securities of the foregoing company, we may publish the (favorable) information about the issuer referenced above advising others, including you, to purchase; and while doing so, we may sell the securities we acquired. In addition, a third-party shareholder compensating us may sell his or her shares of the issuer while we are publishing favorable information about the issuer. Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. CFN Media Group, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. CFN Media Group, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. CFN Media Group, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.