Today’s cannabis market is smoking hot. Startup launches abound. Consumer interest is robust. Regulatory guidance is rapidly evolving.

These trends show no sign of abating. Marijuana is fully legal in 11 U.S. states and the District of Columbia. It is medically legal and/or decriminalized in 24 others.

According to Grand View Research the global legal marijuana market is projected to reach USD 146.4 billion by the end of 2025. This has spawned a flurry of new startups worldwide.

According to Fit Small Business, the cost to launch a regulated cannabis dispensary is approximately $775,000. Annual operating costs for a regulated dispensary average are around $1.92 million annually.

As is the case with any developing industry, the cannabis space is ripe with ambitious entrepreneurs who are often still new to the business world. At the same time, there are experienced business leaders who can set the pace for the others.

With the continued evolution of the industry, heavy regulation is beginning to take hold. With oversight and conformance with state laws and regulations vital for success, startups need a single source of truth where organizational decisions and actions can be effectively facilitated through document creation, management, and cap table management tools.

An Evolving Landscape

The cannabis industry is facing a corporate governance problem. And it’s one that startups can ill afford to turn a blind eye to, given the frequently changing regulatory landscape.

Today’s cannabis businesses must maintain strict compliance with state regulations along with federal law. Often shareholder registries are managed through the use of rogue spreadsheets. Because of the human element, they are often susceptible to errors.

The issuance of new shares or options prompt updates to these registries. Many early-stage companies use convertible notes which transfer into equity based on targeted milestones. The problem with this is that these transactions don’t always occur correctly. So anytime there are discrepancies in these records, they can be very time consuming and costly to reconcile.

Given the importance of these authentic record of ownership, these errors can be problematic. If the information is incorrect or out of date, contacting shareholders to vote on major acquisitions or a sale can prove difficult.

This is where the promise of a new normal comes into the picture.

In short, Equa endeavors to allow companies to focus on their core business while taking care of the nitty-gritty backroom stuff that they cannot achieve in terms of bandwidth, knowledge, and experience.

There are a number of ways that Equa hopes to become a differentiator for cannabis companies:

Compliance: Because Equa is an all-in-one documents platform it can help address regulatory concerns, It can also serve as a valuable tool for KYC (Know-Your-Customer) procedures.

Information Transparency: The blockchain allows for the storage of relevant corporate information (i.e., shareholder name, address, shares, etc.) all on a digital, immutable ledger. This will provide an easy way for shareholders of cannabis enterprises to register their holdings directly with the company, rather than through a broker. Moreover, a distributed ledger approach can offer greater public access to share ownership percentages, boosting the likelihood of more informed investment decisions.

Voting Transparency and Shareholder Engagement: Equa can provide a mechanism that allows shareholders easier access to their voting rights, proxy transfers (if required), and more accurate vote tallying.

Organization and Efficiency: Equa can mitigate the need for paper share certificates while providing an accurate documentation record of shares issuance and ownership. It can help streamline organizational processes as well as reducing asset transfer settlement times. And in some cases, counter-parties could potentially be eliminated altogether.

Conversions: Through the use of smart contracts, preferred shares could automatically be converted to common shares with each financing round. Each transaction will be recorded in the digital ledger, eliminating the need for human updates or multiple copies of shared registries.

To learn more about Equa and sign up for a free trial, please visit us at www.equa.global

Starting a business is an exciting endeavor. The possibilities for success are unlimited.

But the road to success is not easy. It requires long hours, dogged persistence, and the expenditure of funds.

With the takeoff of your entrepreneurial venture, you may have noticed the impact it’s having on your time and finances. This requires your constant attention in order to ensure that these vital resources are not depleted.

Developing a business plan without an effective cap table or other financial tools often lead to unfortunate business failures. Without a mechanism for accurately tracking historical financials, it becomes a challenge to accurately assess new company revenue and costs.

The good news is that while these critical obligations may be a challenge, they are certainly manageable with the right systems in place.

Here at Equa, we provide a broad range of solutions for managing the time and financial demands of your business. Targeting the simplification of business agreements, our platform allows members to create a new business, obtain a bank account, and secure a tax ID within minutes. This allows business owners to significantly reduce the amount of time and money involved in establishing and managing a company.

Starting a business can be a time and money vacuum. Given the explosive growth of small businesses and registered entities worldwide, Equa is on a trajectory to becoming the pre-eminent one-stop global destination for documents, banking, and compliance.

Says founder and CEO Shawn Owen“We are excited to offer an enterprise cloud solution that allows businesses to draft, sign and manage all of their operational agreements. We also provide tools for managing an organization’s capitalization table and ownership structure.”

He concludes: “Ultimately, the real magic is in the ability to manage ongoing edits or evolution's needed for any action or transaction from your dashboard at the click of your fingertips. We aim to make corporate governance and high finance easy and fun while providing business leaders with an efficient system for managing their time and financial demands.”

To learn more about Equa and sign up for a free trial, please visit us at www.equa.global

A “Cap Table” (short for “Capitalization Table) is a document, typically in the form of a spreadsheet or table, that offers a snapshot of a company’s equity capitalization and total market value.

While commonly used by startups and early-stage businesses, cap tables have utility for all types of companies. In the case of a new startup, the founders are typically the only ones represented on the cap table. This is because they’re the sole equity holders. But as a company matures, the volume of cap table entries expand pursuant to growth in the number of investors as well as company ownership changes.

These documents aim to capture shareholder equity and other sorts of information including common equity shares, preferred equity shares, warrants, and convertible equity. With this, cap tables become a vital decision-making tool for assessing equity ownership, market capitalization, and market value.

Given the financial significance of this information and the fact that companies are constantly evolving, it is paramount for a cap table to be accurate, tailored, and kept current and up-to-date.

One of the common pitfalls with cap tables is that a manually updated Excel spreadsheet can morph into more than one version.

By way of example, the company chief financial officer might manage one copy while outside legal council holds another version. So if a staff member exercises their option and the company forgets to provide an update of this to the lawyer (or vice versa), the two records become inconsistent. It’s here where the reconciliation of these records can become time-consuming and costly

There are many factors and emerging trends that impact capitalization. Therefore accurate and up-to-date cap table provides are paramount for fostering strategic direction and business growth.

To learn more about Equa and sign up for a free trial, please visit us at www.equa.global

Maintaining a clean, paper trail of securities transactions is a prevailing issue for many companies. At the nexus of this is SEC Rule 144, which stipulates that certain conditions must be met in order for the sale of securities to take place.

The effective tracking of securities is vital for private companies seeking to enter the public marketplace. Steering clear of knotty compliance issues and delays pursuant to any SEC due diligence reviews is paramount.

A key qualifier for the Rule 144 exemption is meeting the holding period for each security issued prior to resale. Pursuant to the Securities Exchange Act of 1934, an issuing company that’s also a reporting company has a qualifying holding period of six months. For those companies that are not in a reporting capacity, the qualifying holding period is one year.

This holding period commences on the original issuance date of the security, irrespective of resale or conversion. Many private companies, however, fail to track and account for this on their capitalization tables. This can be problematic if an audit is ever conducted.

To learn more about Equa and sign up for a free trial, please visit us at www.equa.global