SEC’s Investment Rule Updates and Cannabis Fundraising
Recently the SEC updated its rules to simplify the patchwork of regulations to help companies in fundraising mode. This matters to cannabis companies of all types, especially those that want to utilize the available federal exemptions in their securities offerings. In the SEC’s own words, “These amendments will promote capital formation and expand investment opportunities while preserving or improving important investor protections.” To hemp and marijuana companies, these changes mean they will have access to a wider pool of prospective investors. These amendments become effective 60 days after publication in the federal register.
The SEC is really taking big strides this fall. I previously wrote about the SEC’s recent expansion of who and what can qualify as an accredited investor. We can expect future refinements to the SEC’s rules to provide more opportunities for investors looking for opportunities and more guidance for companies looking for safe harbors from legal snags when dealing with investors.
The recently updated rules are designed to help startups and more experienced SMEs that have proof of concept in their business models and are in their first or fifth fundraising round. Below are some highlights.
Increased Offering Limits for Regulation A (Reg A), Regulation