In a first for US investors, a privately held cannabis and hemp producer in California launched a stock offering after receiving a qualification from the Securities and Exchange Commission (SEC).
Goldenseed is a Santa Cruz, California, based company planning to offer one million shares of its own class B common stock for a price of US$10 a share with a minimum purchase restriction of 10 shares per investor.
The company received a qualification after months of conversations with the SEC, from which it claims to be the first US private cannabis producer to obtain a qualification.
According to one of the company’s advisors, the decision by the federal regulator signals a changing landscape for the way the business of cannabis is viewed.
Kendall Almerico, securities counsel with Goldenseed, told INN the process to obtain a qualification from the federal authority resembles the items needed for an initial public offering: two years of financial records made publicly available and a disclosure of both the business operations and the risks attached to it.
The company began offering its stock to the public, through its website, on Monday.
“Most companies and some critics of what we were doing said that this couldn’t be done because of cannabis … being illegal at a federal level in the United States and then going and asking a federal agency like the SEC to review our offering and to qualify us to sell our stock,” Almerico told INN. “Some people said it couldn’t be done. So I think most companies shied away from trying it.”
The company elected to offer its stock using this route compared to pursuing a public listing in Canada, the epicenter of the public capital markets for cannabis, to retain control of its growth, said Scott Goldie, CEO of Goldenseed.
The Goldenseed representatives think making their stock offering available across the country will create a way for investors to be more aware of the company, as Goldenseed awaits to begin selling its products across state lines.
“So as we’re generating the leads throughout our stock offering, we literally have someone from every state in the union that’s registered to find out about investing in our company,” Goldie said.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
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