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    How to Finance a Marijuana Business
    How to Finance a Marijuana Business
    How to Finance a Marijuana Business
    Ebook68 pages1 hour

    How to Finance a Marijuana Business

    By Private Placement Handbook Series

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    About this ebook

    This hand book shows the reader how to use SEC Rule 506(c) to raise money for marijuana start-ups and small businesses.
    Three developments signal a new regulatory regime is underway.

    • The U.S. Department of Justice announced it will not interfere with marijuana retail sales as long as all state and Federal rules are followed and all taxes are paid.

    • The U.S. Treasury Department’s Financial Crimes Enforcement Network issued formal guidance to U.S. banks on how to do business with marijuana firms.

    • The President of the United States mentioned marijuana and alcohol in the same sentence.

    An enormous, quasi-dormant underground economy is awakening and large components are coming to the surface. Taylor West, deputy director of the 440-member National Cannabis Industry Association, said, “There is a whole canopy of products that goes beyond plants.” He cites cannabis-infused foods and drinks, cannabis oils, butters, tinctures, and salves.

    New regulatory demands will spark other opportunities such as laboratories to test for impurities and software systems to track product from seed-to-sale. But make no mistake about it: Some investors in some of the publicly-held cannabis-connected companies will lose money.

    LanguageEnglish
    PublisherPrivate Placement Handbook Series
    Release dateApr 27, 2014
    ISBN9781310072314
    How to Finance a Marijuana Business
    Author

    Private Placement Handbook Series

    After getting a JD from Stanford Law School, a MA from the University of Chicago, a diploma from the University College London, and working as a reporter for The Wall Street Journal, Doug was a member of the California bar for 40 years, during which time he founded a series of law reporting services now owned by Thomson-Reuters. Doug specializes in debt and equity crowdfunding. He helps small business identify and solicit sources of private equity. Doug monitors a LinkedIn discussion group, State Securities Regulation, with 1500 members. Connect with Douglas Slain: LinkedIn: http://linkedin.com/in/douglasslain Facebook: http://facebook.com/douglas.slain Twitter: https://twitter.com/exemptofferings Blog: http://www.privateplacementadvisors.com/apps/blog Web site: http://privateplacementadvisors.com

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      I am doing research for my final MBA requirement and this book is concise and offers crediable information.

    Book preview

    How to Finance a Marijuana Business - Private Placement Handbook Series

    How to Finance a Marijuana Business

    Author: Douglas Slain

    Publisher: Wellness and Cannabis Foundation

    ~~~

    Smashwords Edition

    Copyright © 2014. Wellness and Cannabis Foundation

    Smashwords Edition, License Notes

    This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

    The illegality of cannabis is outrageous, an impediment to full utilization of a drug which helps produce the serenity and insight, sensitivity and fellowship so desperately needed in this increasingly mad and dangerous world.

    --Carl Sagan

    Table of Contents

    Preface

    Chapter One: The End of Prohibition

    Chapter Two: Market Opportunities

    Chapter Three: The Cole Memorandum

    Chapter Four: Colorado versus Washington

    Chapter Five: The Future of Recreational Marijuana

    Chapter Six: Top 10 Problems and Some Solutions

    Chapter Seven: State-by-State Status

    Chapter Eight: Key Takeaways from 2014

    Chapter Nine: Cannabis Niches

    Chapter Ten: Direct Public Offerings

    Chapter Eleven: Rule 506(c)

    Chapter Twelve: Hemp

    Appendix: The Cole Memorandum

    Selective Glossary

    About the author

    Preface

    Today medical marijuana is legal in twenty-one states and Washington D.C.

    Two states, Colorado and Washington, legalized marijuana for recreational purposes in late 2013.

    Other states, including New York and New Jersey, are considering plans to legalize medical marijuana and, eventually, recreational marijuana.

    The marijuana industry is not just a matter of direct product sales, estimated to be in the billions of dollars. The market also incorporates any number of ancillary businesses ranging from consulting to marketing to the manufacturing of vaporizers and security systems to seed-to-sale software systems that track inventory.

    Many still argue that the industry is not ready for prime time insofar as

    Federally-chartered institutions continue to be understandably reluctant to accept deposits. Similarly, institutional investors are still mostly sitting it out, waiting for some resolution on the Federal level.

    There are remaining vocal opponents to the whole industry and some feel legalization is bad public policy. This is big tobacco-redux, says Kevin Sabet, director of Drug Policy Institute at the University of Florida and a former official with the Office of National Drug Control Policy. They know the only way to make money is to create addiction.

    Jeffrey Miron, a senior fellow at the Cato Institute, favors decriminalization but warns, The door is slightly ajar but not enough to let the horses gallop out. Miron believes that the marijuana industry should be treated as the tobacco and liquor industries but feels the classification of cannabis as a felony-level drug cannot be ignored and he suggests deep caution at this time.

    However, Sabet’s and Miron’s views are becoming increasingly in the minority. A recent Gallop poll showed that 58 percent of Americans are in favor of recreational marijuana becoming legal, while an even larger percentage are in favor of legalizing medical marijuana.

    Three early 2014 developments signal a new regulatory regime is on the way.

    • The U.S. Department of Justice announced it

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