Lately I have been spending a lot of time engaging with clients who are dealing with cannabis investors. I work with companies and investors.
Between public and private cannabis companies, the suite of investors runs the gamut from friends and family to key employees, executives, and board members with equity and synthetic equity grants, to single and group angel investors, through venture capital and into private equity. Even very early stage cannabis companies’ cap tables can get convoluted.
Cannabis Capital Raises Are Never Simple
As I discussed previously, any time a cannabis company or an individual takes money from outside sources, the company has issued securities. The legal work required for normal securities transactions is significant, even if you are raising only a modest amount of money from friends and family. Add a multistate patchwork of cannabis regulations over that, and the complexity increases. Then add international cannabis companies that are engaging cross-border transactions and potentially listing on public U.S. exchanges and you’re at an entirely different level.
What Cannabis Investors are Looking For
I often get asked what cannabis investors are looking for. The answer to that question depends significantly on the sophistication of your prospective investors. Friends and