Getting in on the Ground Floor of Cannabis Investment
Written by: High Times
Friends often tell me they want to invest in the cannabis industry but feel it’s too late or they want to participate but they don’t think they have the means. Instead of giving financial advice, I tend to just put things into perspective and tell a true story about a small tech startup and the power of private equity:
Today, 11 years later, Dropbox has been valued as high as $12 billion, and in its first day of public trading in March 2018, the stock opened at $29 per share. Had I invested $500 in Dropbox back in 2007, my shares would now be worth roughly half a million dollars. But I can’t beat myself up. At the time I was legally prohibited due to SEC regulations from investing in Dropbox, Facebook, Amazon, and other promising startups—and you probably were too.
But things are different now.
Before 2015, you weren’t legally allowed to invest in private equity unless you were an accredited investor, which is a person or business with more than $200,000 in annual income or $1 million in assets. This rule was designed to protect investors but what it also did was shut out these opportunities to nearly all everyday Americans who just happen to have a lower net worth.
Federal legislation established in 2012, the Jumpstart Our Business Startups Act, or JOBS Act, was designed to fix this inequity and required the U.S. Securities and Exchange Commission to create new guidelines. Enter Regulation A+ (a.k.a. Reg A+): a set of rules instituted by the SEC in 2015 to make it easier for small businesses to crowdsource investments and give all Americans—regardless of their individual net worth—the chance to get in on the ground floor of large-scale, early-stage investment opportunities.
Many who missed out on the tech boom are now looking to the burgeoning international cannabis economy. Regulation A+ offerings have been a boon for everyday people who want to invest in cannabis, as well as marijuana businesses in need of startup or growth capital.
Because cannabis is still illegal at the federal level in the U.S., traditional institutional investors such as big banks and venture capital firms are wary of the risks involved—and, as with any investment, there are risks. That said, Reg. A+ offerings are closely monitored by the SEC, which regulates America’s securities industry and stock exchanges.
Several cannabis companies have already issued offerings to the general public with great success:
This brings us to Med-X, a green technology manufacturing company that has spent the past decade developing multiple successful verticals in the mainstream health and cannabis sectors, including all-natural, environmentally conscious products for pest control, aromatherapy, pain management, and cannabis cultivation. In addition, Med-X is expanding its digital media platform, The Marijuana Times (where I serve as Editor-in-Chief) and developing new cannabis-related products. Med-X has a Live Regulation A+ offering on the StartEngine platform, with a minimum investment of $420. So far our Reg A+ Title IV offering has over 1,800 investors and has raised nearly four million dollars and going.
As with any Regulation A+ offering, we’ve been thoroughly vetted by the SEC.
This is the future of investing. Our group and many others like the companies listed above are paving the way for other cannabis companies to use the power of the crowd to raise capital and get people involved.
Our investors have the opportunity to directly participate in building a diverse set of cannabis businesses deeply rooted in sustainability, with a detailed vision for expansion and growth. Our management team has intentions to one day offer our investors liquidity by tokenizing the securities or entering a public exchange. Joining the Med-X family is a rare opportunity to get in early just like the VC’s did back in 2007 and become a part of a rising cannabis industry that is revolutionizing our economy.