Salem, MA, Sept. 27, 2021 (GLOBE NEWSWIRE) -- As cannabis is legalized state-by-state, an industry once taboo is entering the mainstream. However, financing cannabis continues to be a major challenge, as most lenders will not or cannot partake in any part of the industry. The solution? Retrofitting 2016 investment crowdfunding regulations to allow communities to invest directly into cannabis businesses looking to launch or expand locally. Through RegCF (regulation crowdfunding, as outlined in the JOBS Act Title III), cannabis businesses can access previously untapped capital while communities play a more active and equitable role in the growth of the industry.
Mainvest, a FINRA-regulated RegCF funding portal, is leading the charge to make RegCF the mainstream for cannabis brands. CEO Nick Mathews notes how Mainvest differs from other funding sources: "We enable capital access from the community to give cannabis entrepreneurs competing against large private equity and venture-funded conglomerates a path to fund and grow their enterprises."
Community support has been a major factor in the growth of the cannabis industry. Citizens have had to vote for legalization; localities must approve new dispensaries; passionate communities have forged safe usage into the mainstream. However, individuals have largely been left out of the business side of the industry, leaving much of the growth to private investors and well-connected founders. RegCF is the future of the cannabis industry, enabling everyone, regardless of wealth, to see some of the upside of the industry, and empowering a wider array of founders.
Mainvest, in particular, allows cannabis businesses to raise capital through an investment vehicle called the Revenue Sharing Note. RSNs entitle investors to a percentage of the business's revenue over a set period time until a maturity date. This works well for businesses reliant on cash flow, as repayments are flexible yet predictable. It also allows businesses to take on up to $5MM in capital without diluting ownership or dealing with equity, which can be particularly difficult in the cannabis industry. Another major upside for the cannabis industry is that repayments don't begin until the business begins generating revenue, so businesses with a long lead time don't have to worry about making repayments before they're even off the ground.
The inaugural cohort of cannabis businesses raising capital through RegCF on Mainvest includes:
- Eastcoasterdam, a cultivation and extraction business in Winchendon, MA
- @loudgirlgoodies, an edibles brand based in Boston, MA
- Grown by Green, an organic cultivation site in Gloucester, MA
- Milkmen Cannabis, a cultivation facility in Clinton, MA
Each offering page displays details of the business, intended use of funds, founder backgrounds, data, and risk disclosures.
Since the launch of Mainvest's pilot cannabis project, the platform has seen an influx of sign-ups from companies looking to raise capital. In addition, a number of news outlets across the country have written on what Mainvest is doing for cannabis entrepreneurs, including Politico and Cannabis Business Times. In the words of CFO Ben Blieden, "Mainvest has solved the age old problem of funding for cannabis businesses, a problem that has no other solution at the moment."
Mathews says they are "all in" when it comes to cannabis. Earlier this month, the team attended NECANN (New England Cannabis Convention) to spread the word on this new viable capital route for cannabis entrepreneurs, and sponsored space at the Cannabis Connection Convention. Stay tuned to what they are up to by following along on Instagram (@mainvestinc) or any of their socials, and learn more at mainvest.com.
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