CannaFundr cannabis business crowdfunding review
Find funding for your cannabis business on this no-fee crowdfunding platform, but with some drawbacks.
- Best for startups that process cannabis products.
- Pick something else if you want to fund a grower or dispensary.
Anna Serio is a trusted lending expert and certified Commercial Loan Officer who's published more than 950 articles on Finder to help Americans strengthen their financial literacy. A former editor of a newspaper in Beirut, Anna writes about personal, student, business and car loans. Today, digital publications like Business Insider, CNBC and the Simple Dollar feature her professional commentary, and she earned an Expert Contributor in Finance badge from review site Best Company in 2020.
CannaFundr is an equity-based cannabis crowdfunding platform to help entrepreneurs get the money they need to grow their business. After you set up a campaign, investors provide money in exchange for a small percentage of ownership. It’s modeled on social media sites to make it as user-friendly as possible — especially for those looking to invest.
While growers and dispensaries can get funding through the site, they won’t have as easy a time as companies that manufacture cannabis products. If you want to fund your growhouse or dispensary, you may want to consider other options instead.
How much will CannaFundr cost me?
It’s free to sign up for CannaFundr — and you won’t have to pay back the money you raise since it’s equity-based. What you will lose, however, is ownership. Investors funding projects through CannaFundr get their returns from profits your business brings in.
But you won’t sacrifice as much control as you might with equity funding in another industry. The Securities and Exchange Commission (SEC) caps crowdfunded investments businesses at $2,200, so you won’t have to worry about one investor taking over a large percentage of your shares.
What do I need to qualify?
To apply for funding with CannaFundr, your business must fulfill these requirements:
- Be in a state where marijuana is legal.
- Be cannabis-oriented.
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.
What information do I need to apply?
Have the following documents on hand when you set up your CannaFundr campaign:
- 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.
What industries does CannaFundr work with?
CannaFundr works with all businesses in the cannabis industry. However, it might be easier to get funded if you process, package or sell cannabis products. Cultivation is legally risker for investors, so you could have trouble reaching your goal.
Pros and cons
CannaFundr isn’t right for every cannabis business. Weigh these key benefits and drawbacks before you sign up.
- No sign up fees
- Specializes in startup funding
- Receive one lump sum from a pool of investments
- Many multimedia options for your campaign
- Website is friendly for investors, not businesses
- No phone number to get in touch
- Only investors can see other campaigns
- You can’t follow up with investors who’ve viewed your project
See other cannabis financing options
Is CannaFundr legit?
Yes, CannaFundr is a legitimate crowdfunding platform. It follows federal regulations, only works with accredited investors and encrypts all data you enter on the site and only investors can view your campaign. Its name has also appeared in publications like The New Yorker and Bloomberg Business.
Does CannaFundr get good customer reviews?
Not exactly. Neither CannaFundr nor its parent company CrowdFund Connect have reviews on the Better Business Bureau (BBB) or Trustpilot websites. You can review testimonials from companies that have used CannaFundr on its website — but those are of its industry conferences, not its crowdfunding service
A lack of reviews isn’t unusual for cannabis financing companies. But it does make it difficult to tell what your experience will be like.
How do I set up a campaign on CannaFundr?
Follow these steps to set up your CannaFundr campaign.
- Go to the CannaFundr homepage. Scroll to Raising capital? and click Start.
- Click Need to register? and create an account by enter your email address and creating a password.
- Select Entrepreneur, enter your timezone, read the terms of service and click Continue.
- Follow the directions to 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. Investors will contribute to a pool, which your campaign will receive as a lump sum after you reach your funding goals.
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. Each year you’ll receive royalty payments based on your shares.
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.
CannaFundr is likely not the only option you have. Look at other crowdfunding services before choosing a financing platform for your cannabis business.