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Reg A+ will gain momentum in 2020

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Reg A+ 2019

Reg A+ Investing will become big in 2020 and beyond for public and private companies

Before 2015, a business looking to raise money had very limited options. The most common avenues were an initial public offering or raising capital privately. This left only seasoned companies and accredited investors to reap the benefits leaving a pool of investors.

The JOBS Act in 2012, rang in new era for companies and investors. Specifically, Title IV, known as Regulation A+, which is essentially a “Mini-IPO”. Reg A+ has opened opportunities for small-cap U.S. and Canadian companies looking to raise capital and investors looking for new access to pre-IPO investment deals.

The Benefits of Reg A+

In a Reg A+ offering, a company raises investment capital by creating a new class of stock that can be bought and sold on a secondary market (such as national exchange or OTC Markets) by the general public. The offering can also be combined with venture capital, allowing the company to create an even larger raise during the funding round.

A key feature of the Reg A+ process is the ability for companies to “test the waters”. This gives the company the ability to confidentially submit and offering circular to the SEC while also gauging potential investor interest to see if there is enough public interest to justify the offering.

THERE ARE TWO TIERS TO REG A+ OFFERINGS. 

REG A+ TIER 1

Tier 1 Reg A+ offering, allows for companies to have a public offering up to $20 million in a 12 month period, no more than $6 million of which can be raised from affiliates of the issuer company. Reg A+ offerings as subject to both federal and state requirements, and there is no limit to how much any one investor can invest in the offering.

Furthermore, companies raising through a Tier 1 Reg A+ offering have to disclose and submit their financials for review, but are not required to continuously report them once the Tier 1 offering is complete.

REG A+ TIER 2

A Reg A+ offering have more stringent regulation that their counterpart. They allow for a company to raise up to $50 million in a 12 month period, not more than $15 million can be raised from affiliates of the issuer company.

Unlike Tier 1, the Tier 2 offerings are subject to federal review only, but they do require addition and ongoing reporting requirements such as audited financials with semi-annual and annual reporting. Furthermore, no investor or group can invest more than 10% of their annual revenue or net worth in a Tier 2 offering.

WHY WOULD COMPANIES FILE FOR A REG A + OFFERING

The process of setting up a Reg A+ offering is less complicated and more cost effective than a traditional IPO. This makes to appealing to small-cap, micro-cap market sized companies who wish to raise capital without going public.

Initially, Reg A+ offerings were only available to non-SEC reporting companies. However, in 2017, a provision was added allowing for SEC-reporting companies to raise capital through an online offer under Reg A+.

The new amendments to Reg A+ lower the barriers to entry for small-cap companies seeking public offerings. They also allow for added flexibility when structuring transactions – bridging the gap that exists between public and private offerings, reducing the costs and complexity of running a public entity.

SECURITY TOKEN OFFERINGS

Reg A+ offerings will also be the go to investment vehicle for STO (security token offerings), as more companies opt to raise through the new ICO compliant raising model.

Facebook Libra Cryptocurrency is really aimed at accredited investors! Don’t be fooled

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facebook libra cryptocurrency

Facebook Libra Cryptocurrency is really aimed at accredited investors

Facebook announced their Libra Cryptocurrency but there are two coins being “minted”.

Libra coin has 2 very distinct and separate uses, it is in fact two separate coins. While one coin will be used for mass adoption for the unbanked approx. 2 billion people globally the second is aimed directly at the institutional and accredited investors.

Facebook newly announced cryptocurrency reeks with everything that Facebook is, or has become, it is lack of innovation and lack of foresight backed by Billionaires who have no connection with real world issues.

Facebook Libra Coin

The humanitarian Libra coin which Facebook will tout and be applauded for is nothing new, cryptocurrencies are being used in countries like Venezuela and in developing countries in Africa. Furthermore, Facebook has more to gain by delivering a global crypto currency and digital central bank.

To look at their lack of innovation since 2014, one could argue, that this is just another great way for Facebook to track, monitor and grow their business. Let us be aware of the many concerns about privacy, hacking and tracking that are looming over Facebook in many countries including their issues with 2016 US Election advertising scandals thanks to Russia.  Mr. Zuckerberg sat in the Congressional hearing like a kid who had stolen a car, but, had no idea how it worked.

Their head long jump into global cryptocurrency domination is naive at best. It will generate a mass adoption in cryptocurrencies, but will have so many issues on roll out it will take 2 – 3 years for it to really become a purchase vehicle.

The hype surrounding the crypto currency and the simultaneous order by the SEC that US citizens cannot hole alt coins after September is really a worrying scenario for true cryptocurrency evangelists and early adopters.

Bitcoin, will stay in and slowly grow, it is after all the Granddaddy of all crypto currencies, and Ethereum will become the true innovator of the landscape delivering the real crypto landscape to the enthusiasts and developers. Facebook, however, will be the behemoth that will create nothing new and keep many in ignorance of real developments in the blockchain and crypto universe.

The social network recruited the founding members of the Libra Association, a not-for-profit which oversees the development of the token, the reserve of real-world assets that gives it value, and the governance rules of the blockchain. “If we were controlling it, very few people would want to jump on and make it theirs” says Marcus.

Each founding member paid a minimum of $10 million to join and optionally become a validator node operator (more on that later), gain one vote in the Libra Association council, and be entitled to a share (proportionate to their investment) of the dividends from interest earned on the Libra reserve users pay fiat currency into to receive Libra.

Libra Investment Token for Accredited Investors

Facebook has a second coin the “Libra Investment Token”, their real reason for the cryptocurrency entrance. This coin will only be available to Accredited Investors and Institutional investors to be used as investment in more companies and enterprises that Facebook will slap its logo on.

If the masses are not able to use the coin then really its not a cryptocurrency at all and Mark Zukerberg and his team of billionaire VCs have not understood anything about crypto currency.

One Central Global Crypto currency, just this term should be like nails on a chalk board to any decentralized digital ledger convert.

We will see the crypto landscape become exactly what we railed against, a centralized, elitist currency that will control the worlds entire cryptocurrency value.

I am all for cryptocurrencies but I do believe if we refer to the idealism of non-governance and non-centralized systems, we should be holding our heads down now at the death of a dream.

Facebook, last year banned blockchain advertising along with ICOs, as did Google and now they are launching an assault, on many blockchain and crypto projects, while the SEC cower to the might FB Coin.

If my dreams can come true, this will fall along side the much hyped and yet to be delivered EOS platform and people who actually do not get their news from Facebook will standfast.

This will not happen and Facebook will become the controlling crypto currencies and we will all be forced in some way or another to adopt this coin. I could quote revelations in the Bible, but this mark of the beast is not real evil its just not good for people as a whole.

 

10 Reasons why STO (Security Token Offering) Will Become Huge Investment vehicle

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Security Token Offering

10 Reasons why STO (Security Token Offering) Will Become Huge Investment vehicle

In 2017 the world learned about initial coin offerings (ICO) as the start-ups began raising capital in a new and innovative way. In 2017 and 2018 more than $14 billion as invested through ICOs in Blockchain companies as investors were eager to cash in on the crypto craze. The companies too held this as a new, less complicated and expensive way to raise capitals.

Since 2018 the ICO market has gone all but bust, but the legacy of the new crowdfunded investing model will become a mainstay for many companies who will enter into legitimate raises in the future.  More start-ups will look to tokenize real assets and leverage the power of the crowd to finance their next project. The new regulation put in place by the U.S. Securities and Exchange Commission (SEC), has deemed all crypto assets except Ethereum and Bitcoin as securities for all projects seeking exposure in the U.S. Market.

The SEC has stated that it does not differentiate between so0called utility tokens and security tokens. All token offerings must comply with federal securities laws. Hence, the new investing vehicle the Security Token Offering (STO).

10 Reason why the STO will change then investment ecosystem

High-quality, compliant cryptocurrencies are a sought after commodity. Early STO investors will become a new breed of investors. As with early bitcoin and crypto investors they will have most to gain.

  1. STO Credibility

    STOs that follow federal guidelines and are approved by the SEC will become instantly credible. Furthermore, this will take more of the grunt work investors will face in evaluating the projects or the companies.

  2. Legitimizing crypto investing

    Increased regulation and credibility will help to end much of the stigma around cryptocurrencies among traditional investors. STO investors are banking on more than just institutional investors and look beyond bitcoin futures and custodial services.

  3. Micro-investments

    The main attraction of ICOs was the low barrier to entry relative to other capital markets. STOs could take micro-investing mainstream and allow more people to participate and invest in Start-Up ventures that were previously restricted to institutional, VCs and Accredited investors.

  4. Crypto as a Security

    Platforms like tZero will become more popular and familiar and help deliver new regulated STOs for trading. This will mean cryptocurrencies will be traded lie a security, giving STO investors ownership, voting and asset allocation rights. This could mean STOs being included in tax-free savings and retirement accounts.

  5. Ownership of Security

    Whereas the “utility tokens” were delivered as future access to a product or service, a security token represents actual ownership of and underlying asset. If you invest in a real estate STO, you will actually hold shares in a physical property rather than an IOU for a future date.

  6. Programmable Ownership and Compliance

    Security Tokens are programmable by nature, this ensure compliance protocols can be embedded into actual assets and amended over time. ICOs did not have this level of sophistication

  7. High Success Rate

    Most of the ICOs have gone bust or are in the process of going out of business. The early track record for STOs has been extremely positive. STOs currently have a 99% success rate. ICOs were merely pipe dreams based on white papers. STOs have something real to offer investors.

  8. Low Fees for STO Investors

    Blockchain technology reduced the need of expensive middle-men and those savings will be passed on to STO investors. The emergence of the low-fee investing will serve to strengthen the STO model with its programmable compliance and ownership features.

  9. Decentralized assets remain decentralized

    As the SEC has already noted, regulation impacting security token offerings have no bearing on assets that are “sufficiently decentralized”, such as Bitcoin and Ethereum. The truth is decentralized money is here to stay and more confidence in in cryptocurrency investing will become the norm among investors of all kinds.

  10. Increases Innovation

    A regulated investment ecosystem for tokenization will open the door for greater adoption and, ultimately, new innovations in the Blockchain arena. A more innovative environment means more investment opportunities and increased returns for STO investors. This trend is already underway as more start ups and institutions continue to utilize and develop more decentralized ledgers.

STO investor
The Security Token Offering Investor Outlook

The days of the ICO are gone, but STOs are an offshoot of the ICO just a more regulated compliant and better investment alternative.  The new paradigm will affect every industry and from standard issuance of stocks and bonds to smaller assets like business shares and real estate.

There is a lot for the STO investor to be bullish about in the future. Security Token Offerings will become more accepted and adapted. Blockchain projects are in their infancy and with companies like Facebook launching their cryptocurrency now is the time for serious investors to look at STO.

How The JOBS Act 3.0 should boost Marijuana Investment

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JOBS ACT Marijuana investors

How The JOBS Act 3.0 should boost Marijuana Investment

The tsunami has all but ended in a defeat for many investors and companies. There is finally good news. The JOBS Act 3.0

The jobs act 1.0 and 2.0 delivered a disruption to investing and helped propel small businesses into multimillion dollar companies.  The great rush of Reg. A and Reg. D and  Equity Crowdfunding seems to have all but halted in the last 2 years for many reasons.

Companies were required to only allow investment form verified  Accredited Investors.  The SEC States An accredited investor is a person that the SEC deems is sophisticated enough to protect themselves in making investment decisions and therefore does not require certain additional protections under certain securities laws.  Currently, to be an accredited investor as an individual, you must (1) earn $200,000 (or $300,000 jointly with your spouse) in income over the last 2 years or (2) $1 million in net worth (excluding home value. There was a major downfall in this strategy, many eligible  Accredited Investors, especially in the US had not verified their status nor had they been given the right material to understand the investments criteria.

Start Up Companies were busy building and marketing their pitch decks and dealing with all the relevant road shows and right things to say. The companies themselves failed to deliver on then best strategy of all to entice investors, and exit strategy.

Indiegogo, Crowdfunder and Start Engine were co-conspirators in a race to entice companies to list on their platforms they did not divulge to the companies that the main strategy investors seek is exits to IPO, Mergers and  Buy Outs.

As with the ICO craze of 2016, many companies made money in marketing and investor relations and many investors did eventually invest only to be dismayed at the lack of forethought in these projects. Over 90% of the ICOs from 2016 are now gone with millions being lost across the board.

While, the JOBS Act gave investors a new avenue and helped companies to deliver an alternative investing vehicle, the accredited investors, were this time left holding the bag.  As more companies were being listed the pool of investors got smaller and less tolerant of mistakes.

In 2014 – 2016 every start up company was the “Uber of ” or was “disrupting some form of economy”, the vast majority of those companies too have run out of funds, or never reached market with their product, even after there was a sizable investment from the members of the equity crowdfunding platforms.

WHAT DOES JOBS ACT 3.0 MEAN FOR COMPANIES?

The JOBS Act 3.0 should be the game changer. This should finally open the doors to investment like never before allowing investors to be accredited by their experience rather than their wealth.

It is now on the companies themselves to deliver solid growth plans and solid ideas. They should have a good team on board who are more than just friends from school and college.  The companies need guidance by seasoned personnel, rather than giving titles out to anyone in the room based on their needs.

The lack of quality education on Equity Crowdfunding and investing is still astonishing in today’s digital age where many  16 year olds had Youtube channels devoted to Crypto.

WHAT IS IN THE FUTURE FOR JOBS ACT 3.0 AND INVESTORS

The JOBS Act 3.0 gives many updates and addendums to the previous 2 JOBS Acts.

The Launch of Venture Exchange is one of the more ambitious and lofty elements, this will no doubt lead to a rush venture exchanges  being brought to market.  It stands to reason, that companies with 10,000 shares should not be regulated equally to those with 10 million shares. The Act 3.0 would allow for the registration of “venture exchanges” with the SEC to provide a venue for small and emerging companies and offer a platform to trade their securities. It would also permit the trading of venture securities, which would apply to early stage companies whose shares are Regulation A+ securities, as well as listed companies whose shares are below the average daily trade volume. The creation of venture exchanges would help even the playing field such that small and startup companies could attract investors.

HOW WILL THIS JOBS ACT 3.0 IMPACT MARIJUANA COMPANIES?

Marijauana and Cannabis companies should be able to utilize some of the many relaxed rules including  the rules for filing confidential IPOs. The current rules permit “an emerging growth company” or any person authorized to act on its behalf file confidentially. The Act 3.0 proposes to change the wording to “an issuer” or any person authorized to act on its behalf. This would widen the pool of companies able to explore confidential filings.

JOBS ACT 3.0 EASING OF REGULATORY BURDENS

The fourth objective of JOBS Act 3.0 is to reduce the economic costs of going public by relaxing the requirements for companies to produce quarterly financial reports. On average, initial regulatory compliance costs more than $1 million in one-time costs associated with an IPO. The Act 3.0 directs the SEC to analyze the costs and benefits of quarterly reports and provide recommendations to Congress for decreasing costs, increasing transparency, and increasing efficiency of quarterly financial reporting. The aim is to allow smaller companies to delay various financial reporting requirements. These tactics would enable more companies to secure an IPO by allowing them to spread the cost over a longer period of time, thus reducing the financial burden of going public.

The Marijuana Industry should be rejoicing and hoping to capitalize on these relaxed regulations along with the recent victory and landmark legalization of marijuana in Illinois just last week. Marijuana, Cannabis and CBD companies now have better access to a larger pool of investors , with less regulation at a critical time for the Cannabis markets.

Accredited Investors can now come for a new class in the investor pool and be self directed. This will help deliver a huge influx of investors into the market and so long as companies have a clear path to exit and solid team this is a win for all.

MARIJUANA INVESTORS SHOULD NOW START LINING UP THEIR PORTFOLIOS FOR 2019-2021

The new acceptance of investment in Cannabis and Marijuana markets as legitimate, of not federally legal yet, is a huge boost for famers, growers and research scientists interested in releasing new medical treatments for Cancer, Addiction, Mood disorders and pain relief.

As more states legalize both in medical marijuana and recreational marijuana use, the older propaganda is not able to out do the merits and positive reports especially from the medical marijuana and CBD research camps.

The older “Reefer Madness” days are slowly fading away as more scientific research points to the legitimate use of these plants and their extracts beyond rolling joints.

Opioid manufacturer Insys files for bankruptcy after $225m settlement

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insys opioid files chapter 11

Opioid manufacturer Insys files for bankruptcy after $225m settlement

A leading drug maker, whose founder and top executives have been convicted of bribing doctors to prescribe a highly addictive painkiller, has become the first opioid manufacturer to declare bankruptcy after being hit with huge fines.

On Monday, Insys Therapeutics filed for Chapter 11 bankruptcy protection while it sells off its assets after reaching a $225m settlement with the justice department last week over fraud charges. One of the company’s subsidiaries pleaded guilty to five counts of mail fraud as part of the settlement.

Insys’s founder, John Kapoor, and four former executives are facing lengthy prison sentences after they were convicted last month of bribing doctors to prescribe the company’s opioid spray, Subsys, to patients who did not need it. Subsys is made of fentanyl, an opioid many times stronger than morphine, and was approved for terminal cancer patients. But the company targeted sales at the much larger and more profitable market of people with non-life-threatening chronic pain.

Kapoor oversaw a marketing strategy in which payments to doctors ostensibly for speeches at educational seminars were effectively bribes to prescribe the drug. Prosecutors said the seminars were no more than social gatherings at restaurants, bars and strip clubs.

In one instance, the company paid nearly $260,000 to two New York doctors who wrote more than $6m worth of Subsys prescriptions in 2014. Sales of Subsys surged into the hundreds of millions of dollars a year as a result of the company’s aggressive marketing.

The US attorney in Boston who prosecuted Insys, Andrew Lelling, accused the company of “illegal conduct that prioritised its profits over the health of thousands of patients” and of “fuelling the opioid epidemic”.

Before the agreement with the justice department, Insys was facing large legal bills as it fought hundreds of lawsuits alongside other companies accused of fuelling an epidemic that has claimed more than 400,000 lives over the past two decades. They include Purdue Pharma, the maker of the powerful opioid, OxyContin, which kickstarted the crisis.

The multinational drug giant, Johnson & Johnson, is in the midst of a civil trial in Oklahoma where it has been accused of “a cynical, deceitful multimillion-dollar brainwashing campaign” to drive up sales of its powerful painkillers.

Oklahoma’s attorney general, Mike Hunter, said greed led the company to play a leading role in “the worst manmade health crisis in the history of the country and the state”. Oklahoma is seeking billions of dollars in compensation to help cover the long-term consequences of the opioid epidemic in the state.

A statement by the lead counsels in the combined legal cases of more than 1,800 states, cities and other communities seeking billions of dollars in compensation from 22 opioid manufacturers, distributors and pharmacies, said they would continue to pursue the legal action against Insys to recover the costs of the epidemic on public finances, from increased crime to addiction treatment and care for orphaned children.

“Bankruptcy and restructuring does not necessarily mean that a company is insolvent. Additionally, the goal of the litigation is not to bankrupt these opioid companies, but to abate the current opioid epidemic and seek long-term, sustainable solutions. If any defendant files for bankruptcy, we will work through all legal avenues to see that our clients’ end goal of abating the crisis is met,” they said. “The American public deserves to see the truth behind this epidemic revealed and justice served.”

Dip in Shares of Aurora Cannabis Creates an Opportunity

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Dip in Shares of Aurora Cannabis Creates an Opportunity

Investors should brace for the steady decline in cannabis stocks to continue in the near term. So long as stock markets decline, fueled by trade tensions between the U.S. and China, markets will have little appetite for risk. Those include companies that are spending to expand but are not yet profitable yet. The FDA’s public hearing on Friday about CBD safety is unnerving investors, too. With that in mind, cannabis play Aurora Cannabis (NASDAQ:ACB) stock is especially vulnerable for a further drop.

Aurora Cannabis reported a big loss in its fiscal third quarter despite revenue tripling over last year’s levels.

Aurora reported revenue of $48.4 million in the third quarter, up 289% from last year. It lost 8 cents a share even though the cost to produce fell sharply, from $1.92 to $1.42 a gram. Aurora Sky coming online lifted operational efficiency and scale. Still, investors might want to wait for the company to report positive EBITDA results before taking too big a position in Aurora stock.

Getting to EBITDA-positive numbers will depend on net selling prices holding above at least the $6 level. In Q3, the average net selling price fell to $6.40, due to a higher mix of dried cannabis sales in the product mix. Excise tax on medical cannabis also hurt prices as Aurora absorbed this cost. Revenue from extracts fell, hurting ASP. Looking ahead, when extraction capacity increases, extract sales will increase and will lift ASP.

Aurora forecasts EBITDA-positive numbers for the fourth quarter as it puts its inventory into new products. Its stock price is trending downward today but could quickly reverse if the company’s sales drive EBITDA profitability next quarter.

Aurora Cannabis Increasing Production

Aurora forecasts annual production capacity of 100,000 kilograms in 2019 and 150,000 kilograms by the first quarter of FY 2020. Output volumes will benefit from the Bradford and Sky facilities coming online to increase production.

Aurora and the other cannabis producers will continue to benefit from targeting the under-served, under-supplied Canadian market. With very strong demand in the country, Aurora may grow market share faster than competitors the sooner its facilities produce more product.

Aurora’s addressable market could potentially grow in an instant. This would depend on regulatory changes and coverage. Just as its addressable market increased following cannabis legalization in Canada, the same could happen in Europe. For example, insurance reimbursement approvals in Europe would give the industry 850,000 potential patients.

Sell-Off Creates a Buying Opportunity

In the near-term, Aurora will trade like a wild speculation because it does not have any profits yet. With the ~14% drop in the stock price in the last week and an 18.5% drop in the last month, traders who missed the rally may look at ACB stock again. After closing recently at $7.16, the stock’s accelerating downtrend could send shares back to the $5-$6 level, its lows for 2019. At that level, traders could start another position and hold the stock. By waiting for the company to increase production to meet the strong demand, a smaller loss or a break-even quarter could spark a stock rally.

Six of the seven analysts covering Aurora Cannabis have a “buy” rating on the stock and a $9.18 price target (per Tipranks). In a 5-year DCF Growth Exit Model, the company needs revenue growing by at least 100% annually to justify a fair value of between its $7.16 stock price and $8.50.

Your Takeaway for CGC Stock

Cannabis legalization will no doubt continue worldwide, creating a bigger addressable market for cannabis suppliers. In the short-term, the stock price of companies like Aurora Cannabis is prone to a sell-off. It could also spike higher when market fears subside. Timing either event is impossible.

If an accredited investor wants exposure to the cannabis stock sector, check MMJ Fund

Facebook FTC Buzz Sparks Unusual Options Volume

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Facebook FTC Buzz Sparks Unusual Options Volume

Alphabet (GOOGL) sent the broader tech sector reeling out of the gate on news the Department of Justice (DoJ) is considering an antitrust probe into the search engine giant. Losses have only accelerated for fellow FAANG stock Facebook, Inc. (NASDAQ:FB), after a Wall Street Journal report indicated the Federal Trade Commission (FTC) secured the right to lead antitrust investigations into the social media firm as part of a broader deal that allows the DoJ to head the Google inquiry.

At last check, FB stock was down 7.2% at $164.75 — set for its worst day since Dec. 19 — and options traders are in overdrive. With about 90 minutes left in today’s trading, around 372,000 calls and 220,000 puts have been exchanged, four times what’s typically seen at this point in the session. Plus, Facebook’s 30-day implied volatility has spiked 20.5% to 35.5%, which registers in the 98th annual percentile.

The weekly 6/7 175-strike call is most active, and Trade-Alert suggests some buy-to-open activity is occurring here. The volume-weighted average price on these calls was most recently seen at $0.94, which would make breakeven for the call buyers at the close this Friday, June 7 — when the weekly options series expires — $175.94 (strike plus premium paid).

Today’s call-skewed session is nothing new for Facebook options traders, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock’s 10-day call/put volume ratio of 2.08 ranks in the 76th percentile of its 52-week range, meaning calls have been bought to open over puts at an accelerated clip.

The optimism is seen outside of the options pits, too. While 31 of 36 analysts maintain a “buy” or better rating, the average 12-month price target of $222.35 is a 35% premium to current trading levels. This leaves the door open for a round of bear notes to come through, should FB stock continue its recent slide.

In fact, Facebook stock is now down 17% from its late-April peak above $198, trading below the $500 billion market cap level. But while the shares are on track to close below their 120-day moving average for the first time since before a late-January bull gap, they have found a foothold atop their 200-day trendline.

fb stock daily price chart on june 3

Marijuana will be Legal in Illinois

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Marijuana Set to become Legal in Illinois

Illinois Marijuana legalization

On Friday, Illinois lawmakers approved recreational marijuana legalization. This delivers another huge  step in nationwide recreational legalization in one of the biggest markets in the US.

Marijuana Investors will see another huge market open in 2020, helping build momentum in the Cannabis Markets. Illinois will set another new bar for nationwide legalization of Marijuana.

The highly contention debate in Springfield which included one lawmaker cracking eggs into a frying pan to depict “brain on drugs” was a victory in favor of recreational legalization on Jan 1st 2020 by a 66-47 vote by the House of Representatives.

The Gov of Illinois J.B. Pritzker plans to sign the bill into law. Illinois will become the 11th stated to legalize cannabis and the first state which a legislature approved commercial sales. Vermont has previously legalized possession, but, as of yet not commercial sales.

The general argument of opponents was of more addictions, mental impairment, and drugged-driving deaths, while the proponents spoke of a need to end the failed was on drugs.

Marijuana legalization is expected to generate much need revenue in the coming budget to help rebuild poverty and crime ridden communities and help fund substance abuse, mental health and law enforcement services.

 “This will have a transformational impact on our state, creating opportunity in the communities that need it most and giving so many a second chance,” Pritzker said in a statement.

A detailed 610 page bill, delivers how marijuana and cannabis is meant to be taxed and regulated similar to current alcohol, with rules on affecting its use.

Here are some answers from the Legislature in Illinois on Cannabis and Marijuana legalization:

WHO CAN GROW MARIJUANA?

Only 20 existing licensed Medical Marijuana cultivation facilities will be licensed to grow Marijuana initially.  Next year, craft grower may apply for licensed cultivation up to 5,000sq ft, with a preference to applicants in minority areas disproportionally affected by the drug war. This will be focused on the South and West Side of Chicago. Medical Cannabis patients will be allowed to grow up to five plants each at home.

WHO CAN BUY MARIJUANA IN ILLINOIS?

Illinois residents age 21 and over may possess up to 30 grams  or about 1 ounce of flower (roughly as much as an adult can hold in cupped hands), 5 grams of cannabis concentrate or 500 milligrams  of THC – the chemical that gets users high – in cannabis infused products such as gummies, and other candies, tinctures and lotions. Adult visitors to the state may possess 15 grams of marijuana.

Illinois Cannabis legal

WHO CAN BAN IT?

Municipalities and counties may ban cannabis and marijuana businesses within their boundaries, but may not ban individual possession. Any person, business or landlord may prohibit use on private property. Colleges and universities may continue to ban marijuana use.

WHERE IS CONSUMPTION PROHIBITED?

Marijuana use in Illinois will be prohibited in any public place like street or park, on school grounds (except for medical use) , in any motor vehicle, in any correctional facility, near someone under 21 years of age, while driving boat or flying plane. It is OK to use at home, as long as outsiders cant see it.

HOW DOES IT AFFECT CRIMINAL RECORDS?

The governor will pardon past convictions for possession of up to 30 grams, with the attorney general going to court to expunge or delete public records of a conviction or arrest. For possession of 30 – 500 grams, an individual or state’s attorney may petition the court to vacate and expunge the conviction.

HOW WILL MARIJUANA BE TAXED IN ILLINOIS?

Sales will be taxed at 10 percent for THC levels at or less than 35 percent; 20 percent for cannabis-infused products such as edibles; and 25 percent for THC concentrations of more than 35%. That’s in addition to standard state and local sales taxes. Municipalities may add special taxes of up to 3%, counties may add up to 3.75% in unincorporated areas, and Cook County may add up to 3% in municipalities.

Ignite International Brands Raises $25.8 Million Selling Shares at $1.50

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Ignite International Brands Raises $25.8 Million Selling Shares at $1.50

Ignite International Brands Announces Closing of Previously Announced Subscription Receipt Financing for Gross Proceeds of $25,800,000

VAUGHAN, Ontario, May 24, 2019 (GLOBE NEWSWIRE) — Ignite International Brands, Ltd. (the “Company”) today announces that 1203238 B.C. Ltd. (“Finco”) completed a non-brokered offering (the “Offering”) of 17,200,000 subscription receipts (the “Subscription Receipts”) at a price of $1.50 per Subscription Receipt for gross proceeds of $25,800,000 (the “Offering Proceeds”). The Offering was completed in conjunction with the reverse takeover (the “Transaction”) of the Company to be completed by the shareholders (“Ignite US Shareholders”) of Ignite International, Ltd. (“Ignite US”), other than the Company, pursuant to the terms of a business combination agreement among the Company, 1203243 B.C. Ltd., Finco, Ignite US and the Ignite US Shareholders dated as of April 9, 2019, as amended as of May 6, 2019, as announced by the Company on March 1, 2019 and April 11, 2019. Following closing of the Transaction, the issuer resulting from the Transaction (the “Resulting Issuer”) is expected to continue under the name “Ignite International Brands, Ltd.” with the subordinate voting shares of the Resulting Issuer (the “Resulting Issuer Shares”) listed for trading (the “Listing”) on the Canadian Securities Exchange.

The Subscription Receipts were issued pursuant to the terms of a subscription receipt agreement (the “Subscription Receipt Agreement”) dated as of May 24, 2019 (the “Closing Date”) among Finco, Cordell Consultants, Inc., as representative of the holders of Subscription Receipts and Odyssey Trust Company (the “Subscription Receipt Agent”) as subscription receipt agent. Pursuant to the terms of the Subscription Receipt Agreement, the Offering Proceeds, together with all interest and other income earned thereon (the “Escrowed Funds”), will be held in escrow and will be released to Finco upon satisfaction of the Escrow Release Conditions (as defined herein). Upon satisfaction of the Escrow Release Conditions, each Subscription Receipt will automatically be converted into one common share of Finco (each, an “Underlying Share”) and immediately converted into one Resulting Issuer Share. The escrow release conditions (the “Escrow Release Conditions”) are:

  • written confirmation from each of Ignite US and the Company that all conditions to the completion of the Transaction have been satisfied or waived, other than the release of the Escrowed Funds and the closing of the Transaction, each of which will be completed forthwith upon release of the Escrowed Funds;
  • the distribution of: (i) the Underlying Shares, and (ii) the Resulting Issuer Shares to be issued in exchange for the Underlying Shares pursuant to the Transaction being exempt from applicable prospectus and registration requirements of applicable securities laws in Canada and the United States;
  • the Listing being conditionally approved and the completion, satisfaction or waiver of all conditions precedent to such Listing, other than the release of the Escrowed Funds;
  • the receipt of all required shareholder and regulatory approvals; and
  • the delivery of a joint written notice from Ignite US and the Company to the Subscription Receipt Agent confirming the conditions set forth in (a) through (d) above having been satisfied or waived.

The Escrow Release Conditions must be satisfied on or before September 20, 2019 (the “Escrow Release Deadline”) unless extended in accordance with the terms of the Subscription Receipt Agreement. In the event that the Escrow Release Conditions are not satisfied or waived on or before the Escrow Release Deadline, or if Finco advises Ignite US and the Company or announces it does not intend to satisfy the Escrow Release Conditions prior to the Escrow Release Deadline, the Escrowed Funds will be returned to the holders of the Subscription Receipts on a pro rata basis and the Subscription Receipts will be cancelled without any further action. It is currently contemplated that the Escrow Release Conditions will be satisfied by May 30, 2019.

The net proceeds from the Offering will be used by the Resulting Issuer for working capital and general corporate purposes.

For further information, please contact:

Eddie Mattei
Tel: (905) 669-0623
Email: eddie@ignite.co

Original press release

Gotham Green Completes Initial $100 Million Tranche of the MedMen Secured Convertible Loan

By
Administrator
-

Gotham Green Completes Initial $100 Million Tranche of the MedMen Secured Convertible Loan

MedMen and Gotham Green Partners Close Additional Funding Tranche – Designated News Release

LOS ANGELES, May 23, 2019–(BUSINESS WIRE)–MedMen Enterprises Inc. (CSE:MMEN) (OTCQX:MMNFF) (FSE: A2JM6N) (“MedMen” or the “Company”) is pleased to announce that, further to its press release dated April 23, 2019, MedMen has been advanced an additional US$80,000,000 in gross proceeds pursuant to the US$250,000,000 secured convertible credit facility (the “Facility”) with Gotham Green Partners, an investor in the global cannabis industry.

MedMen has issued to the lenders additional convertible senior secured notes (“Notes”), co-issued by the Company and MM CAN USA, Inc., a subsidiary of the Company (“MM CAN”), with a conversion price per Subordinate Voting Share of the Company equal to US$3.29 per share. The lenders have also been issued 10,399,851 share purchase warrants of the Company (“Warrants”), each of which is exercisable to purchase one Subordinate Voting Share of the Company for a period of 36 months from the date of issue. The number of Warrants issued represents an approximate 50% Warrant coverage. The exercise price of 75% of such Warrants is US$3.718 per share, with the remaining 25% of such Warrants having an exercise price per share equal to US$4.29. As additional consideration for the purchase of the Notes, at the time the lenders were paid an advance fee of 1.5% of the principal amount of the Notes purchased.

The Notes and the Warrants, and any Subordinate Voting Shares issuable as a result of conversion of the Notes or exercise of the Warrants, will be subject to a four month hold period from the date of issuance of such Notes or such Warrants, as applicable, in accordance with applicable Canadian securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws.

About MedMen:

MedMen is a cannabis retailer with operations across the U.S. and flagship stores in Los Angeles, Las Vegas and New York. MedMen’s mission is to provide an unparalleled experience that invites the world to discover the remarkable benefits of cannabis because a world where cannabis is legal and regulated is a safer, healthier and happier world. Learn more at www.medmen.com.

About Gotham Green Partners:

Gotham Green Partners, LLC is a New York and California-based private equity firm focused on deploying capital into cannabis and cannabis-related enterprises on a global scale. The firm manages a diversified portfolio of investments and is actively investing across the cannabis value chain.

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