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Find funding for your cannabis business on this no-fee crowdfunding platform, but with some drawbacks.
As nationwide legalization of marijuana sounds more likely each year, more and more cannabis entrepreneurs are looking to get their business off the ground and running.
One crowdfunding site that helps you find financing for your marijuana-related business is CannaFundr. Among its perks include ease of use, no signup fees, and the ability to customize your profile with photos and videos
Anna Serio is a staff writer untangling everything you need to know about personal loans, including student, car and business loans. She spent five years living in Beirut, where she was a news editor for The Daily Star and hung out with a lot of cats. She loves to eat, travel and save money.
What is CannaFundr?
CannaFundr is a cannabis crowdfunding and investment platform launched by Crowdfund Connect to entrepreneurs get the money they need to grow their business — and possibly their product.
After your business’s profile is approved by CannaFundr, investors contribute to your investment fund. It’s an equity-based platform, meaning that investors get a percentage of ownership in exchange for money. It’s also modeled on social media sites to make it as easy as possible for investors to find, explore and ultimately give money to your business.
What types of businesses does CannaFundr service?
CannaFundr is designed to fund a variety of cannabis-related businesses in the US. Growers and dispensaries can get funding on the site, but they won’t have as easy a time as companies that manufacture cannabis products.
This is because growers and dispensaries are considered more risky businesses from a legal standpoint. If you want to fund your growhouse or dispensary, you may want to take a look at other financing options instead. How to get funding from an angel investor
Do I qualify?
To apply for funding with CannaFundr, your business must fulfill these requirements:
Be in a state where marijuana is legal.
Given the murky laws and legality of running a cannabis business, CannaFundr’s review process is rigorous — and you’re only approved if investors are interested. To increase your chance for approval, make sure you have a solid business plan, investment pitch deck and lots of visuals. See how CannaFundr compares to Fundanna, a competing platform
What documents do I need to apply?
You’ll need to main business documents for success with CannaFundr:
A business plan. Keep your complete document on hand for any investors, and use parts of your plan — like the executive summary, financial model and performance reports — to flesh things out.
An investment pitch deck. Upload a short presentation to your profile to give investors a quick sketch of your business plan.
It’s easy to use for investors. CannaFundr is designed to make it as easy as possible for investors to find cannabis-related businesses to fund.
No signup fees. Setting up a CannaFundr profile is free.
Lots of multimedia options. You can upload videos, images, documents — almost any kind of promotional material — to make your page as enticing as possible.
What to look out for
Website is hard for businesses. The site’s set up with investors in mind, and it might be hard to find answer to your questions. Prepare to spend time figuring things out.
It’s difficult to ask questions. You can’t call CannaFundr if you get confused — and you will — so setting up your profile could take some time.
You can’t look at other projects. The social media aspect of this site applies to investors only. While keeping other projects secret might legally protect businesses, you won’t find a community of like-minded businesses here.
You can’t follow up with investors who’ve viewed your project. CannaFundr cards are entirely in investors’ hands.
How do I apply to crowdfund on CannaFundr?
Go to the CannaFundr homepage. Scroll to “Add your startup company to CannaFundr for free,” and click Get Started.
Sign in using Facebook, LinkedIn or your email account.
Enter your email address and create a password. Select “Entrepreneur,” enter your timezone, read the terms of service and click Continue.
Complete your profile information and click Continue.
CannaFundr should email verification to activate your account — just click the link.
Sign in to your account and click +Apply for Funding.
Create a company profile and click Create.
Fill out your company information and post videos, pictures and documents to flesh out your profile.
CannaFundr notifies you once approved, which is when you can start raising money.
I’ve got an account on CannaFundr. Now what?
Once you’re approved, continue to update and tweak your profile while you wait for investors to contribute. And be sure to let customer service know if you bump into any problems.
Investing through CannaFundr
Investing in the cannabis industry is significantly easier than crowdfunding your business. It’s easy to join, you won’t pay a fee and you can invest as little as $2,500.
But not everybody can become a member. To join, you must be an accredited investor as defined by the US Securities and Exchange Commission. This means that, among other things, you must have a net worth of at least $1 million or earned more than $200,000 annually for the past two years.
Is marijuana legal in my state?
Marijuana regulations by state
Although many states have voted to legalize marijuana, the federal government still classifies it as a Schedule I drug. This makes getting a loan for your cannabis-based business a lot more complicated.
As of September 2017, marijuana is legal to some extent in 28 states and the District of Columbia.
3 mature, 3 immature
3 oz per 14 days
6 mature, 12 immature
3 mature, 3 immature
2.5 oz per 14 days
30-day supply, TBD
60-day supply, 10 oz
4 plants, 12 seedlings
2 oz per 10 days
3 oz per 14 days
90-day supply TBD
6 mature, 18 immature
2 mature, 7 immature
2 oz dried
30-day supply TBD
CannaFundr makes financing for cannabis business a lot easier than in the past. But that doesn’t mean it’s easy. Lots of users complain that it’s hard to navigate — and we had the same trouble.
CannaFundr works very hard — perhaps too hard — to protect user information. Your data is encrypted, but only investors are able to view your profile. Some users complain that they aren’t able to view their own profile at times.
No. Each investor contributes to a fund for your startup, meaning that you’ll only see how much money is raised, not how much money you’re dealing with.
Yes, it’s legal in the US for outside investors to fund cannabis businesses. The only legal problem investors might run into are foreign laws restricting investment in legal cannabis businesses from abroad.
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