Raising Capital: Overview of Exemptions to Registration of Securities in Private Placements

These are uncertain times. Even before the world-wide COVID-19 pandemic, companies seeking to raise capital in the cannabis industry were facing challenges. However, some experts and insiders I’m hearing from are bullishly predicting that investors with dry powder will increasingly deploy capital for investment purposes. Other informed contacts are less optimistic, with forecasts painting a more negative outlook on the macro level.  As is often the case, both perspectives could turn out to be correct. Regardless, now, more than ever, with no accurate crystal ball in hand, it is critical for cannabis companies pursuing funding to be able to take comfort that they are properly navigating securities regulations.

This latest installment of my series on fundraising outlines at a very high level some of the most popular securities exemptions from registering securities.  Subsequent posts in this series will examine a number of these common exemptions in greater detail.

Under the federal securities laws, a company may not offer or sell securities unless the offering has been registered with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) or an exemption from registration is available.  A … Keep reading

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