Los Angeles-based medical marijuana startup Med-X has been granted SEC approval to raise funding under Regulation A+, a new policy that allows both accredited and non-accredited firms investors, or those earning less than US$200,000 (AU$256,000), to invest in a startup.
According to Crowdfundinsider.com , Med-X will offer its shares "for a minimum US$420 (AU$554) for 700 ordinary shares." Med-X is currently developing an insecticidal soil that keeps pests that destroy marijuana crops at bay with all-natural and organic materials.
The offering circular said that the company accepts up to US$15 million (AU$19.8 million) at US$0.60 (AU$0.79) per share. The raised funds will be used on running the company’s publication, MarijuanaTimes.org, as well as for research and development, the construction of a cannabis pharmacy and a facility for marijuana cultivation, and operating expenditures.
"The biggest and best way we can show our commitment to the people who need medical cannabis is through our current equity crowdfunding initiative on StartEngine," CEO Dr. David Toomey enthused in a statement announcing the launch of the crowdfunding campaign.
Dr. Toomey explained that the crowdfunding effort was made possible by the SEC's final ruling on equity funding regulations through the JOBS Act. "We knew that it would be a great opportunity to involve and support our consumers," he said.
Barely a month into the launch of the campaign, the company has already received more than US$1 million (AU$1.3 million) in indicated interest from over 600 individuals. As of late, about 1,176 investors have signed up to register their non-binding indications of interest amounting to some US$3.7 million (AU$4.9 million).
"While this is certainly exciting news on the capital front, we feel it's most important because it shows a real connection has been established with our consumers," Toomey stated.
According to company Chief Operating Officer Matthew Mills, the offering levels the playing field for American investors and allows them to take advantage of the growing cannabis sector without the hurdles of accreditation requirements. Mills also noted that by investing in Med-X, investors are not only putting their money on the marijuana industry, but also on "green medicine."
Stocks of pharmaceutical companies developing epilepsy drugs based on marijuana climbed recently, buoyed by new developments for their studies. The financial and business media were all abuzz about GW Pharmaceutical, in particular, which saw its shares rise by 123 percent, according to The Guardian. The company's stocks almost doubled, rising to 481.75p in the UK, or about AU$9.17.
GW Pharmaceutical's stocks were lifted by its announcement that its Epidiolex drug had effectively lessened seizures in patients with Dravet, which had no available treatments yet in the US, The Guardian reported.
Zynerba, meanwhile, soared by 150 percent, according to Fortune, and continues to soar after trading. The company is currently working on ZYN002, a synthetic cannabinoid that comes in the form of a gel and applied on the skin. Insys Therapeutics, a company that develops a cannabis-based epilepsy drug for adults and children, also edged higher by 11.38 percent on Monday trading last week.