Cannabis and COVID-19
Cannabis and COVID-19
While we have observed a decrease in deal activity (particularly in the area of real estate), I have worked on two deals over the past week in the legal cannabis sector, one for a client in Delaware and another in Texas. Legalized cannabis has the greatest potential to provide a source of tax revenue that will be so needed by every level of government to fund the COVID bailouts.
Wiederaenders Law Firm, PLLC has represented legal cannabis businesses since 2010, when we represented a California medical marijuana collective and I served as a member of its Board of Directors. Since then, we have paid particular attention to this growing sector of the economy. We intend to update this page from time to time with articles focusing on how the COVID epidemic and the unprecedented bailout spending by our government will accelerate the legalization (and taxation) of not only medical, but recreational cannabis.
SEC Announces COVID Form ID Notary Relief
SEC Announces COVID Form ID Notary Relief
To file a Form D for an exempt offering under Regulation D Rule 506, you must first register for access to the Securities and Exchange Commission’s online EDGAR filing portal by filing a Form ID with the SEC. The Form ID is a simple form signed by the president of the issuer providing certain basic identifying information about the issuer, but one of the requirements to the form is that the president’s signature must be notarized.
Under the current conditions, the SEC is temporarily waiving the notarization requirement.
Stay safe everyone! #openforbusiness
Estate Planning and Investment Advice
Please contact me for your estate planning needs. I also can offer limited investment advice and asset management consultation as services incidental to my legal services.
I don’t normally advertise these services, but they certainly are available through my firm. I’m encouraging everyone to take time during their quarantines to get their personal finances in order.
My firm is offering a special FREE consultation. We normally charge a minimum of $500 for 1-1/2 hours of attorney time, but with this special, we are offering 1/2 hour of attorney and/or paralegal time for FREE.
Contact us today!
Infinitum Electric — 2020 AHR Expo Innovation Award Winner! Congratulations to our client, Infinitum Electric Inc. for its win at The AHR Expo Innovation Awards, “an annual competition that honors the most inventive and original products, systems and technologies.” There is a cool video about Infinitum featuring its founder and CEO, Ben Schuler here […]Read Full Text Filed Under
Here is a link to proposed rules from the SEC. I see these changes as having limited utility for most of my clients. Very roughly, 95% of all private securities offerings rely on Rule 506 of Regulation D. None of my clients has relied on Rule 504 in a VERY long time, not because of […]Read Full Text Filed Under
Securities Law and Cryptocurrencies (Editor’s Note: This article was written with the invaluable assistance of Mr. Rane Riley, a third-year law student at Southern Methodist University’s Dedman School of Law, my alma mater.) Anyone paying attention to world news headlines has witnessed the recent meteoric rise in the value of Bitcoin, a cryptocurrency (or virtual currency) […]Read Full Text Filed Under
Regulation D Rule 501(a)(8) Inquiry A potential client asked me whether their LLC would be deemed to be accredited under Regulation D Rule 501(a)(8) (“[a]ny entity in which all of the equity owners are accredited investors”) if the only members of the LLC were the client (an individual) and his mom (also an individual)? His […]Read Full Text Filed Under
Raise $5 Million From Non-Accredited Investors Under Amended Rule 504 On October 26, 2016, the SEC adopted final rules amending Rule 504 of Regulation D under the Securities Act of 1933, as amended (the “Act”). This amendment to Rule 504 was effective January 21, 2017, and the repeal of Rule 505 (described herein) was effective […]Read Full Text Filed Under
Rule 506(b) Information Delivery Requirements to Non-Accredited Investors As we know, Regulation D of the United States Securities Act of 1933, as amended (the “Act”), provides exemptions from the Act’s securities registration requirements, most notably, the registration exemptions found in Rule 506: Rule 506(b) and Rule 506(c). Many people get very excited when they learn […]Read Full Text Filed Under
As a crowdfunding attorney, most of my attention has been focused on the US federal JOBS Act, the new federal legislation that President Obama signed into law in 2013, the final rules of which only went into effect in 2016. Another significant, recent amendment to the federal securities laws was enacted on December 4, 2015 […]Read Full Text Filed Under
I was present at the death of my stepfather, Richard, on February 28, 2017, and his passing has impacted me greatly. I know Rich’s wife (my mom) has been affected by his passing even more than me. Rich experienced a stroke in October 2016 that left him with aphasia, the inability to speak or verbally […]Read Full Text Filed Under
This is a frequently asked question that I thought would be useful to answer here. For your Texas LLC, we will need you to pick a name. The more unusual the name, the better it is from an availability standpoint, but simplicity is equally as important because you will be transacting business in the name of the […]Read Full Text Filed Under
In Part 1 of this article discussing real estate syndicators’ obligations under the investment adviser laws, I provided you with the not-so-good news that the SEC and the state securities regulators really do want managers and general partners to real estate investment funds to register as investment advisers even though they are “only” providing advice […]Read Full Text Filed Under
If you read Rule 506(b) under Regulation D, you won’t find the word “sophisticated.” The rule specifies that each of your investors that is not “accredited” must “have such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment, or the issuer reasonably believes immediately […]Read Full Text Filed Under
I have been needing to research this issue for a while, and found this excellent article. “[U]nder the controlling U.S. Supreme Court ruling (Reves v. Ernst & Young, 110 S.Ct. 945 (1990)), federal law also sets up a rebuttable presumption that a promissory note with a maturity greater than nine months IS a security (as the […]Read Full Text Filed Under
(Editor’s Note: This is Part 1 of a two-part article, with Part 2 at this link.) Texas and United States federal law requires that any person who for compensation gives advice with respect to securities is obligated to register as an investment adviser, either with the state securities regulator of the state where the adviser has its […]Read Full Text Filed Under
“Integration” is the SEC’s term for treating two or more securities offerings as a single offering. For example, an issuer theoretically could rely on the exemption found in Rule 506(c) and the exemption under Regulation A, and simultaneously conduct separate offerings relying on two different exemptions. This is a great article discussing how the SEC’s integration rules […]Read Full Text Filed Under
As we all know by now, the Jumpstart Our Business Startups Act (the “JOBS Act”) created new exemptions not only from the registration requirements of the Securities Act of 1933, as amended, but also from the reporting requirements under the Exchange Act of 1934, as amended. These reporting requirements require issuers to file regular 8Ks, […]Read Full Text Filed Under
A client recently asked whether a foreign (i.e., non-U.S.) person could invest in private securities offered by a United States domestic issuer (such as a Texas limited liability company). In this context, “private” securities are securities sold and issued to an investor under an exemption from the registration requirement of the Securities Act of 1933, […]Read Full Text Filed Under
It [almost] goes without saying that issuers of private securities in any equity financing transaction must address each step of the transaction in detail. This is true whether the financing is crowdfunded or whether it is distributed using more traditional means. One such important detail is how investment proceeds are paid to the issuer. (If […]Read Full Text Filed Under
Rule 139.19 is a uniform exemption from the securities registration requirements of the Act for the sale of securities by an issuer to accredited investors. The exemption is not available to an issuer that is in the development stage that either has no specific business plan or purpose or has indicated that its business plan […]Read Full Text Filed Under
In our continuing series of state law provisions exempting issuers from selling their own securities, we visit California! California Administrative Code (10 CCR Section 260.004.1) adopts the US federal issuer exemption under Rule 3a4-1 of the Exchange Act. “The term “broker-dealer,” as defined in section 25004 of the Corporate Securities Law of 1968, does not […]Read Full Text Filed Under
Here is a long post about Florida and private Rule 506(c) offerings in my ongoing series about whether you must use a broker-dealer to sell securities in a Rule 506(c) offering. For new readers, remember that issuers of securities must abide by both US federal and state securities laws. Regarding the registration rules, Florida does […]Read Full Text Filed Under
I almost hesitate to talk to people about being finders in Texas, because according to one Texas State Securities Board regulator, the list of registered finders in Texas is the TSSB’s “hunting ground”. After that caveat, if you still want to be a finder in Texas, please see this handy Texas Finder Registration guide. As always, call with […]Read Full Text Filed Under
In an SEC Order Instituting Cease-and-Desist Proceedings, California attorney Mark A. Ivener agreed to disgorge transaction-based compensation that he had received in connection with referring clients to an EB-5 Regional Center. Interesting to me, the Order provides that “[w]hile some of Respondents’ activities overlapped with legal services, for which they earned fees, Respondents earned transaction-based compensation for […]Read Full Text Filed Under
https://crowdfundattny.com/2016/06/17/can-a-crowdfunding-issuer-sell-its-own-securities/comment-page-1/#comment-5407 Mark Roderick is an expert in this area, but I do question some of his assertions in my comments to his article. It sounds like he is saying that because of the ability to use advertising with Rule 506(c) offerings, issuers no longer can sell their own securities (without using a broker). He suggests […]Read Full Text Filed Under
For offerings conducted under Securities Act Section 4(a)(6) (i.e., the “crowdfunding” exemption), the JOBS Act amended Section 18(b)(4) of the Securities Act to add to the list of covered securities for which preemption applies, securities that are the subject of crowdfunding offerings exempt under Section 4(a)(6) of the Securities Act. At the federal level, the […]Read Full Text Filed Under
What is an “Issuer”? An “issuer” is any “person” who sells and issues its own securities. A common example is a corporation that sells its stock to investors to raise money to fund its business operations. If a corporation owned stock in another company, it could theoretically sell that stock to raise money to fund […]Read Full Text Filed Under
What is a “Security”? Under US federal securities laws, the definition of a “security” is derived from the “economic realities” test first espoused by the U.S. Supreme Court in 1946 in the case, SEC v. W.J. Howey Co., 328 U.S. 293. Under the Howey Test, an economic interest in a business will be classified as […]Read Full Text Filed Under
What Is An Accredited Investor?: Part 1 “Accredited investor” is term used in the US federal securities laws specifically in connection with the sale and issuance of private securities pursuant to a regulatory exemption under the Securities Act of 1933. The regulatory exemption is known as “Regulation D” and is found at 17 C.F.R. § […]Read Full Text Filed Under
What Are Private Securities? Section 5 of the United States federal Securities Act of 1933 generally provides that it is unlawful for any person to sell its securities unless there is a “registration statement” in effect. The process of filing a registration statement with the SEC is long, arduous, and expensive. At the end, your […]Read Full Text Filed Under
Using Advertising To Sell Your Securities It truly is an exciting time to be a securities lawyer. In the past, advertising has been prohibited in connection with any offer and sale of private securities. To unpack the significance of that statement, you have to understand what private securities are, and then also understand how the […]Read Full Text Filed Under