First Canadian Marijuana Crowdfunding Platform Launched On March 2, Ascenta Finance Corp., a licensed exempt market dealer, and KoreConX Corp., a company that specializes in crowdfunding, launched Bay Street Cannabis (“Bay Street”), Canada’s first online equity crowdfunding portal dedicated to the cannabis sector. Bay Street provides public and private legal cannabis and cannabis-related businesses with access to investors. Like the U.S., Canada’s laws have recently made it possible for Canadians to purchase securities of cannabis companies. The Canadian cannabis sector is clearly moving into the future financing, but what about the U.S.? What is Crowdfunding? In its simplest form, crowdfunding is raising money in small amounts from a large number of people. Various forms of crowdfunding have developed in recent years, including donation-based crowdfunding, rewards based crowdfunding and equity based crowdfunding. Donation crowdfunding entails asking a large number of contributors to fund a project or charitable cause. Rewards-based crowdfunding involves seeking contributions from a large number of people but offering a reward of some sort in exchange, for instance an investor in a bed and breakfast might receive a vacation package in exchange for a donation of a certain amount. Equity crowdfunding differs from the previously described variants because it involves business owners giving up a percentage of their ownership in their company in exchange for funding. Equity crowdfunding allows businesses to gain access to serious investors on a scale that the other types of crowdfunding do not. In the U.S., there are three types of equity crowdfunding. The first type allows accredited investors to view private investment opportunities on a password-protected website. The second type of equity crowdfunding allows businesses to raise an unlimited amount of capital from an unlimited number of accredited investors. The final type of equity crowdfunding allows unaccredited investors to participate in securities offerings. There are more regulatory requirements for companies that allow crowdfunding by unaccredited investors because these investors are typically not as sophisticated as accredited investors. State of Marijuana Crowdfunding in the U.S. The crowdfunding space in the U.S. has not yet seen the entrance of an institutional investment firm, instead the landscape consists of a few legitimate equity crowdfunding offerings and platforms and various donation-based crowdfunding websites. Equity Crowdfunding Regulation D Offering In 2014, CannaFundr, the first cannabis investment crowdfunding platform was launched by CrowdFund Connect. CannaFundr is open to accredited investors and syndicates investments so that investors can participate for a minimum investment of $2,500. JOBS Act, Regulation A+ Offering In late 2015, Med-X, Inc. (“Med-X”), a company that produces cannabis-related products, became the first cannabis company to launch a Regulation A+ equity crowdfunding campaign. Med-X representatives report that the company has raised over $1 million from over 600 investors to date.