Why crowdfund cannabis?
1. The cannabis industry is struggling for access to private capital
With the failure of the SAFE Banking Act at the end of 2022 and VC investments down 95%, most institutional money has been steering clear from cannabis investments as well. Until recently, the cannabis industry has been 100% funded by private wealth.
With the market downturn and predatory-like lending that cannabis businesses are now faced with in the search for capital, the opportunity opens for the public to replace private investors.
2. Crowdfunding helps cannabis businesses grow without private capital
Without crowdfunding, private companies could only accept investments from accredited investors and a limited number of non-accredited investors. This means only the wealthiest 2% of Americans could invest in cannabis.
With Cocannco’s Regulation D and Regulation A+ offerings, cannabis companies can access capital. And Reg A+, in particular, will allow the general public to replace accredited investors to fund the cannabis industry.
3. Crowdfunding helps support long-term industry growth
It’s only a matter of time before cannabis is federally legalized and private wealth dominates the cannabis market once again. New Frontier Data reports that in the US, cannabis sales are poised to grow beyond $50 billion in 2025. While cannabis access to capital is throttled, those companies with access to crowdfunding have the potential to build stronger foundations upon which to grow.
4. Crowdfunding can help strengthen cannabis banking standards
As the cannabis industry grows and matures, a new wave of banking standards is needed. Many cannabis companies over the past decade were forced to function on a “cash only” model because of limited banking options and couldn’t use consumer credit cards. This complicated bookkeeping and forced companies to maintain substantial cash vaults susceptible to theft or money laundering.
The good news is that limited checking and savings banking have become available through select state-chartered banks and credit unions. These banks and credit unions must follow strict due diligence in FinCEN guidance to provide deposit or lending services to a cannabis business.
So, while federally chartered institutions would still be in danger of losing their license for allowing cannabis banking, there are alternatives. As cannabis companies expand through investor capital, they must work with well-regulated, higher-standard banks and follow more transparent and ethical bookkeeping standards.
Cocannco’s Crowdfunding
Cocannco is eligible for Reg A+, which means that once qualified, we can sell shares to the general public, not just accredited millionaires.
As a fundraising company prioritizing crowdfunding and a broad investor base, we can continually return to our investors for more funds as companies scale. At the same time, we want to connect the general public to the best companies to which they wouldn’t otherwise have investment access.
We want to support successful teams and serve as their ongoing fundraising partners as they grow through expansion or acquisition. We provide the cash infusion they need to grow using our crowdfunding platforms. Compared to other firms, we raise these funds without intending to take over the company operations or squeeze them dry for our gain.
The minimum investment is only $500.
Ready to get in on the ground floor?