She’s been called the “Martha Stewart of Marijuana” for her conversational tips and tricks on everything from rolling joints to entertaining with edibles to the way weed impacts parenting. Now cannabis lifestyle expert Jane West is charting new territory as one of a handful of entrepreneurs in the legal space trying to fund her startup through equity crowdfunding. It’s an online investment vehicle the SEC green-lit in 2016 that allows just about anybody to invest as little as $10 to receive a small ownership stake in an early stage startup. In late January, she kicked off her campaign on the portal Republic, to raise $1.07 million by April 20th.
“My 71-year-old mother was able to invest in my company right from her apartment on her laptop,”marveled West at how accessible she finds this relatively new way of fundraising. The minimum investment in her campaign is $25.
She plans to deploy the cash to ship her sleek collection of glass pipes, beakers and discrete compact cases to retailers around the globe and to build out a more robust sales team. West partnered with scientific glass designer GRAV to create a line of cobalt blue and white accessories that she envisions hostesses will one day display with pride in their living rooms along with their crystal brandy decanters and highball glasses. She initially intended to raise $25,000 but quickly surpassed that goal within 24 hours.
“The community driven nature of the cannabis industry lends itself very naturally to equity crowdfunding,” explained Caroline Hofmann, Republic’s chief operating officer, of the response to West’s campaign so far.
Jane West is not the first cannabis-related venture to try to raise capital through equity crowdfunding. In January, RMR Laboratories, raised $813,309 on Republic. RMR produces a line of medical cannabis skin creams for pain relief. HelloMD, which bills itself as the “Amazon of cannabis” raised $3 million in equity crowdfunding via SeedInvest last year. And there are now a few platforms focused exclusively on cannabis, including Fundanna.
The decision to raise money from a wide audience came about after West, a mom of two boys based in Denver, spent two years trying to round up funding for the launch of her luxury marijuana accessory line. She got her first investor check in 2015 and ultimately raised more than a million dollars in seed funding but says the process was brutal. She felt there had to be a better way.
“It took up so much of the limited human resource hours we had in startup mode to try to raise capital when we should have been focusing on product design, execution, making sure all of our packaging is on brand and so many other more important things,” she recalled of the days she spent making cold calls and sitting through unfruitful meetings.
Even though she enjoys a high profile, including as co-founder of Women Grow, the first national professional networking organization in cannabis, West didn’t have a large personal network of wealthy individuals she could approach. Until recently, SEC rules only allowed “accredited investors,” those who met a minimum net worth and income, to invest in early stage startups.
“I didn’t even know what an accredited investor was. I’m not an accredited investor. So the whole process took longer than I thought and was more draining to the company’s resources than I had imagined,” reflected West.
What made it even more difficult is that West’s eponymous company designs products for a market that has long been federally illegal in the U.S. And even though her business has nothing to do with growing, processing or selling marijuana, it carries a stigma that made some traditional investors nervous. It’s a common challenge for entrepreneurs trying to break into the legal cannabis industry who do not have connections to venture capital nor access to traditional lending options.
For West, with little over a month left in her campaign, the journey has been inspiring.
“It feels great. Every single time we hear from an investor about how they believe in us and our products and in our future, it feels so good and it’s literally the polar opposite of how I would feel hanging up from VC investor calls,” she said.
And she believes the educational aspect of crowdfunding, which requires entrepreneurs and their devoted fans to aggressively promote their campaigns in order to be successful, also helps meet her objective of normalizing marijuana use. West sees massive opportunities ahead for brands like hers to break through to consumers as more states legalize cannabis.
“At the end of the day, brands matter. This is how Americans purchase products. Whether it’s Johnson & Johnson or Ford. Those are brand names that were people who started those companies and Americans are drawn to brands. So this is an entirely new product category and in that one product category, it feels like a limitless number of verticals, which go from dog snacks to seizure medications, right? The possibilities really just are endless in this space,” she underlined, “This is still the beginning, beginning, beginning.”
By: Heather Cabot, Women@Forbes