CannaFundr is a Cannabis-oriented investment platform offering AngelList-style syndicate investments, as well as information about Reg A+ offerings. The site (built with white-label platform CrowdFund Connect) is nice, but the offerings are limited with sparse information. For now seems more oriented toward industry networking than investments.
- Website: https://www.cannafundr.com/
- Investment Types: Startups/Business Financing
- Security Types: Equity
- Sectors: Cannabis
- Minimum Investment:
- Open to all investors
- Some investments open to all investors
- Interesting social-network component to interface
- No investor fees
- Syndicate model similar to AngelList
- Startup investments are already inherently risky and illiquid, and additional uncertainty around cannabis industry adds to that risk
- Low selection of offerings
- Site interface can be confusing with mix of social network, investment offerings, and events.
- Relatively high minimums, even for Reg A+ offerings
- FAQ relatively sparse
While there have been a sprinkling of cannabis-related offerings on other crowdfunding platforms, CannaFundr is one of a handful of niche platforms oriented specifically around cannabis-related investments. Relying heavily on the syndicat model, a reasonable analogy would be to call CannaFundr like “AngelList for the Cannabis industry”.
Types of investments CannaFundr offers
CannaFundr offers investments in startups and growth companies in the cannabis and hemp industry.
What do you get when investing with CannaFundr?
When you invest through CannaFundr, as with many crowdfunding investment platforms, what you actually receive is a membership interest in an LLC created specifically for the investment. The LLC in turn is the actual shareholder in the company.
CannaFundr fee structure
There are no direct fees to investors to participate in CannaFundr, though investors will pay carried interest to the syndicate lead.
Potential returns and cashflow
Investments on CannFundr are high-risk investments in startups and growth companies. Most startups do not pay dividends, and in most cases there will likely not be any secondary market for your investment until there is some form of liquidity event for the company. Most startup investments lose some or all of their value.
Breadth of offerings on CannaFundr
As of this writing, there are only two Reg A+ offerings listed. One has a $25,000 minimum investment, and the other does not display any actual offering details (like minimum investment amount or total amount being raised). There are a handful of Reg D offerings available only to accredited investors.
Regulatory framework and due diligence expectations
CannaFunder offers some investments using SEC Reg D which are only open to accredited investors. CannaFundr is not a registered broker-dealer, and does not list any affiliation with one on their website. The Reg A+ offerings listed don’t appear to have any direct way to invest via CannaFundr, and appear to just be general information about offerings available elsewhere (ie, directly from the company), with an opportunity to submit information and be contacted about investing.
You may be able to invest in CannaFundr using a Self-Directed IRA or 401K. To learn more about using a Self-Directed retirement account for alternative investments, visit our friends at Rocket Dollar.