Cannabis Tech PR

Cannabis Tech Trends and Industry News

The cannabis industry is growing, and it’s happening at an incredible pace. The stigma attached to this trade is slowly but surely slipping. While this doesn’t mean that investors are flocking to invest in every Cannabis related startup, but there are a people who are genuinely interested in funding your business.

The question is, how do you go about getting in touch with these individuals? The short answer is, through crowdfunding. Let’s break it down in detail.

What exactly does crowdfunding entail? Crowdfunding is a process that allows businesses and startups to raise funds for their ventures via ‘backers’ on crowdfunding platforms.

Backers are people who are interested in being a part of your business, sometimes, in turn for a small percentage of ownership of your company, a small share of your profit, or even for early access to your product or service.

If you’re involved in or launching a cannabis business here are three cannabis crowdfunding sites you need to know.

Fundanna

This platform came into being only in 2017 but it definitely specializes in getting together investors from all around the world to support cannabis businesses. This Chicago-based crowdfunding platform offers a minimum loan amount of $10,000 and a maximum amount of $1,070,000.

With the help of Fundanna, startups and cannabis businesses can raise a specific amount within the minimum and maximum bracket. In addition to funding your business, Fundanna also provides advertising support by connecting your business to advertisers who will, in turn, promote your services.

Registration for crowdfunding is easy as well, as all you need is a Facebook, LinkedIn, Twitter, or Google Plus account to sign up for their services. Fundanna has a mobile app that you can use to keep a tab on your progress. The best part about this service is that if your startup doesn’t make the cut if it doesn’t hit its goal. Unlike other crowdfunding platforms, you don’t have to return or payback the investment. However, you should be aware of the fact that registering for crowdfunding through Fundanna means you’ll have to pay a non-refundable listing fee of over $3,500. In addition to this, you’ll also have to pay a success fee (amount undisclosed).

Once you hit the goal and reach your target. Your eligibility criteria for this platform lies in the fact that your business is in the cannabis industry (recreational or medical) in the US. Fundanna does not cater to entities outside the US or if you are a startup that reports to the US Security and Exchange Commission (SEC).

CannaFundr

CannaFundr goes way back to 2014, so this equity crowdfunding platform has been in the game for a while. One of the key points or rather advantages of this platform is that unlike Fundanna, you are not required to pay a listing fee. This also means that investors who contribute to your business’s investment fund will have to get a certain percentage of ownership of your company in exchange for their investments.

While CannaFundr caters to businesses that deal with marijuana as a recreational and medical drug, the former will find it a little difficult to get a favorable response, considering the fact that there are several legal implications attached to marijuana as a recreational drug.

The eligibility criteria for this platform is the same as Fundanna – you need to be an establishment in the US, and not a part of the SEC. Also, you need to be put up in the states where cannabis is legally accepted. As far as the drawbacks are concerned, the site is not up to the mark, and navigation is difficult. In addition to that, approval takes time. They also need to come up with more interactive features that enable you to get in touch with the investors. Unfortunately, it also has tight security features that prevent you from viewing other profiles, projects, and investors.

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Republic

Small businesses now have the opportunity to raise as much capital as $1 million from the public. They can also solicit advice from high-profile entrepreneurs like Naval Ravikant, co-founder and CEO of AngelList, and Jason Calacanis, founder of Inside.com, and an early investor in Uber and Thumbtack. Republic, is an equity crowdfunding platform that recently announced non-accredited investors (i.e., those with limited investment experience, who may earn a salary of less than $100,000 annually,) to give capital to dozens of startups for an equity stake. So far, Republic has enticed 12 companies onto its platform, which it vets based on factors like how promising it views the business model and broader social mission to be.

Other notable mentions include Seedinvest and StartEngine which enable cannabis enthusiasts to participate in early-stage financing.

Quick Recap

Finding the perfect platform to raise funds for your cannabis business can be as challenging as launching the business. The one thing you absolutely need to keep in mind, and we can’t stress this enough is to make sure every step you take is legally backed.

Also, you will be required to have a US bank account set up, so make sure you get the authorization from your banks as well. Pay attention to who your investors are, and make sure that any business plan that you come up with is a fair game for all parties involved.

Stick to the rules, both with crowdfunding sites as well as the rules and regulations of your state. Finally, keep in mind that investing in marketing is the best thing you can do for your company, so work towards this goal, and make it your strong point.

Launching a Cannabis related business? Contact us and let us know about it.