Since the JOBS Act was signed in 2012 the ability for Pre-IPO companies to solicit Accredited investors has been a huge success while also being frustrating for Retail Investors. Accredited Investors have had the ability to invest in companies and gain huge returns on investment.
Domestic startups have hit a new low when it pertains to IPOs for a variety of reasons including the costs and time involved to go public. Going Public can cost $2.5mil which many small companies cannot afford.
JOBS Act 3.0 Investor Confidence
On July 17, 2018 the new JOBS and Investor Confidence Act (JOBS Act 3.0). A package consisting of 32 pieces of legislation principally designed to spur entrepreneurship by reinvigorating business startups and Initial Public Offerings. This new legislation expands further on the 2012 JOBS Act.
The House Financial Services Committee has labeled this as the “third and largest installment of the JOBS Act legislation. Furthermore, this new reform will help streamline the regulations of IPOS, extends certain disclosure exemptions for emerging growth companies (EGCs) and expands the definitions of accredited investors. One key change is that this bill will allow all issuers, not just EGCs, to use “testing-the-waters” communications in connections with security offerings.
The Retail investor has been left hanging, even with offerings in the Reg CF space as companies have sought to keep minimal cap tables with bigger individual investments. The new JOBS Act 3.0 will expand what qualifies and Accredited Investor.
New Accredited Investor Definition
An Accredited Investor is an investor with an annual income of more than $200,000 (or $300,000 for couples filing jointly) for the past two years or a net worth in excess of $1 million. The new Accredited Investor definition will include those who show experience and expertise.
Good News for Marijuana Investors
The Marijuana industry is booming and will increase from $9 billion in sales in 2017 to more than $21 billion in 2021. Moreover, more and more states are setting up to legalize Marijuana both Medical and recreational use which will lead to more growth.
Jeff Sessions who has been a strong opponent of Legal Marijuana has recently been cut from his position paving the way for a more open approach to a Federal Government reversal its continued hard stance on legalizing Marijuana nationwide.
Currently more than 100,000 people are employed in the Marijuana and Cannabis industry at some level, with more jobs being created daily as the industry gets set to come out of its infancy. By 2021 it is estimated nearly 300,000 jobs will be created by this new industry that will include, Bio-tech, cultivation, ancillaries and tech innovation.
States where Marijuana and Cannabis are legal are reporting economic benefits by funneling tax revenue from the cannabis sales into education and infrastructure.
CBD has its benefits
CBD, cannabidiol, is a product in the form of an oil or candy that is being used for treatments of epilepsy and pain management. This will help to lessen the opioid crisis as more patients will opt to use CBD for pain rather than the highly addictive OxyCotin.
The CBD industry totaled $360 mil last year. This industry is expected to grow to $1.8 billion by 2021, while doing a much needed service for patients.
Marijuana Investors take action now
There has never been a better opportunity for investors to gain higher returns on investment in an industry that will not go away and is sustainable.
Investors should keep their eyes open for the new laws to pass and can sign up to get our newsletter which will deliver more updates in the industry and impressive companies making strides in the Marijuana and Cannabis.