I stumbled upon this recent post by Jason Paltrowitz titled “Lawful but Awful: The Small Cap IPO Cycle.” It contains some interesting findings and I like everything about it for cannabis companies, except the conclusion. The conclusion is that OTCQX and OTCQB markets are a good alternative to senior U.S. exchanges for small companies. The
Cannabis companies that need more money than they can generate through sales generally have two options: borrow money (debt) or solicit investments (equity). Over the years as the industry has constricted, equity finance became less of an option. I recently predicted that equity investment will reignite when cannabis is rescheduled. But that hasn’t happened yet,
A common way to get and retain employees is to issue them options or equity securities like corporate stock. But like with everything else, issuing securities is heavily regulated. Today, we’ll look at a few key issues for cannabis businesses that want to offer equity incentives. How do cannabis companies offer equity incentives? There are
Last week, the Department of Health and Human Services (HHS) recommended rescheduling cannabis from schedule I to III under the Controlled Substances Act (CSA). My colleagues already covered various implications of the proposed cannabis rescheduling (see here and here). Today, I want to talk about one of the most important consequences of the announcement other than
Huge news yesterday. Huge! The U.S. Department of Health and Human Services (HHS) has officially recommended that marijuana be rescheduled, from Schedule I to Schedule III of the federal Controlled Substances Act (CSA). This means that the country’s top health agency has finally conceded that cannabis has medical value, and isn’t a drug of abuse
Oregon’s governor recently vetoed an effort to create a state bank for marijuana businesses, in another blow to the struggling industry. The lack of consistent, equitable access to banking has been recurring issue for Oregon marijuana businesses and those in other states. Federal reform through the Secure and Fair Enforcement Banking Act (SAFE Act) has
The California cannabis market is truly struggling all the way around. Cannabis businesses and those who work with them closely face mounting financial pressure. Because of the credit crunch in California cannabis, the state and various impacted distributors and brands are taking steps to help shore up the issues created by cannabis companies that can’t
In an era of Theranos, Fyre Fest, FTX and WeWork, cannabis scams, frauds, and scandals probably pale in comparison. However, cannabis scams (and their evolution) are still worth noting, spotting, and avoiding at all costs. I’ve written about cannabis scams in the past (see here), and it’s one of my favorite topics given the still-emerging
We’ve written regularly about the plight of cannabis businesses not being able to secure traditional lending (and other financial services) from major, federally regulated institutions. In this post, we dive deeper into a promising federally regulated equity offering as an alternative funding means: Rule 504 under Securities and Exchange Commission (“SEC”) Regulation D. Why aren’t
Cannabis and business immigration don’t mix. Or at least that’s the conservative guidance we often give clients that come to us with that question. That’s not because a particular investment may not be sound, rather because federal law creates inherent conflicts between immigration eligibility and participating in a cannabis venture. Kate Robertson at MJBizDaily reported
