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There has been a lot of contention lately over the issuance of retail cannabis licenses in Illinois. Many of the headlines center around disputes regarding the license lottery process itself. However, reading between the lines, it would appear that at least one major underlying concern fueling those disputes is whether the money from the dispensary is going back into the local community or to some outside party. What if members of the local community could easily invest in a local dispensary and benefit from their success regardless of who the owner was? Local community investment is exactly what Illinois Crowdfunding was designed to accomplish and why it might just be the perfect tool to bridge the gap.

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Its official, the “accredited investor” definition, which has not changed significantly since its enactment almost 40 years ago, has been massively upgraded. On August 26, 2020 the Securities and Exchange Commission (“SEC”) adopted final amendments to the “accredited investor” definition which fundamentally change and broaden the qualification standards and increase access to investments in the private capital markets. These amendments are game changing and include both new, non-wealth based, categories for individuals as well as several new entity categories. Corresponding changes are also made to the “qualified institutional buyer” definition in Rule 144A.

The Securities and Exchange Commission (SEC) recently issued a series of proposed rule amendments which, in their words, are intended to “provide a more rational framework, eliminate complexity and increase access to capital while preserving and enhancing important investor protections to simplify.” Among the most significant amendments are the significant increases to the maximum offering amounts under both Reg. A (Tier 2) and Reg. CF (“Regulation Crowdfunding) rules. These amendments will significantly improve the usefulness of these respective offering types, in particular the usefulness of Reg. CF offerings as a serious capital raising option.

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While it passed somewhat under the radar with the holiday season, on December 18, 2019 the Securities and Exchange Commission (“SEC”) released a proposal to significantly amend the existing “accredited investor” definition; which is integral in determining who can participate in private securities transactions. The proposal seeks to add several new categories of both qualifying individual and entity level investors. The proposal is currently in the 60-day comment period, however if enacted in substantively its current form the included amendments will open the floodgates to a ton of new, and in many cases deep-pocketed, potential investors.

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Now I know that this is clearly a far shift from the types of blog articles I typically do. However, given the current financial and other issues facing Illinois and its taxpayers, and the fact that things only seem to be getting worse, I felt compelled to offer my own thoughts on some real ways to help bring this state back from the broke, I mean brink. Continue reading →