Kickstarter phenomenon gets legal boost from Colorado Crowdfunding Act
In response to the passing of the Colorado Crowdfunding Act, a new law to protect issuers and investors who tap crowdfunding as a source of fundraising, Colorado Division of Securities commissioner Gerald Rome on April 14 released a statement after the law took effect on April 13.
Up until then, crowdfunding in Colorado was limited to fundraising ventures on sites such as Kickstarter, where individuals contribute money to an idea, charity or business. Those individuals may receive some kind of perk related to the amount they gave to such efforts, such as a T-shirt or chocolates.
In his statement, Rome pointed out that such types of crowdfunding couldn’t legally offer forms of interest in the company or venture, or any financial incentive.
Yet that changed with the signing of the Crowdfunding Act into law. Now, “equity crowdfunding” is legal in Colorado, which provides small businesses with a mechanism to raise capital and give their contributors equity in the company.
With the new law, Colorado has joined the growing list of states that are opening up private company investing to everyone.
Before small businesses begin using crowdfunding to solicit investments, Rome outlined key aspects of the new law:
First, before a crowdfunding offering can proceed, it must be properly registered with the Colorado Securities Division, a division in the state Department of Regulatory Agencies (DORA). Online intermediaries, through whom the crowdfunding transactions will be conducted, must also register with the Colorado Securities Division.
Second, there are limits to how much capital can be raised and how much individual investors can contribute. The act states that the issuer of the securities can raise up to $1 million in total assets. However, the cap can be raised to $2 million if the business submits audited financial statements to the Colorado Securities Division. Individual investors cannot contribute more than $5,000. If an investor is accredited, the $5,000 cap is removed. An “accredited investor” is defined as having an earned income that exceeds $200,000, or a net worth that exceeds $1 million.
The final important distinction is limiting transactions to Colorado residents only. Crowdfunding transactions that reach outside of Colorado run the risk of violating federal securities laws.
COLORADO POLITICIANS, CANNABIS BUSINESSES HOST FEDERAL RESERVE OFFICIALS TO TALK BANK WOES
Colorado Reps. Jared Polis and Ed Perlmutter on April 9 hosted the chief executive of the Kansas City Federal Reserve, Esther George, for a roundtable discussion with Colorado cannabis businesses and industry leaders.
Polis and Perlmutter invited George to meet with local cannabis businesses to hear firsthand the challenges they face without access to banking.
“We’re glad Esther George was gracious enough to take up our invitation to meet with local businesses and industry leaders here in Colorado to hear how a lack of access to the banking system hurts their business and harms public safety,” Polis said. “We will continue to work at the federal level to solve this problem in a sensible way and allow cannabis businesses to bank in the open without fear of their businesses and private accounts being shut down.”
Currently, under federal banking laws, legal and legitimate marijuana businesses that follow state law are prevented from opening bank accounts and operating as any other business would. They are forced to operate as cash-only enterprises, inviting crime such as robbery and tax evasion and adding to the burden of setting up a legitimate small business.
Today, 23 states and Washington, D.C., continue to face serious public safety concerns due to inaction on this issue.
“I appreciate President George and industry leaders coming together today for a productive meeting to continue the conversation about how to align federal and state laws to ensure access to the banking system for legitimate marijuana businesses,” Perlmutter said. “We have seen progress on this issue but there is more work to be done to address the public safety, crime and lost tax revenue associated with these legal and regulated businesses operating as cash-only operations.”
Last Congress, Perlmutter and Polis introduced legislation (H.R. 2652) to update federal banking rules to resolve conflicts between federal and state laws to allow legitimate marijuana businesses to access the banking system.
Perlmutter plans to re-introduce similar legislation at the end of April.
Polis has also introduced legislation to reform our outdated drug laws more broadly.
His Regulate Marijuana Like Alcohol Act, introduced in February, would remove marijuana from the Controlled Substances Act and leave the decision to legalize up to the states.
BRECKENRIDGE OPENS BIDS FOR SUMMERTIME SH 9 BEAUTIFICATION PROJECT
The town of Breckenridge recently opened bids for the next phase of the median beautification project along state Highway 9.
The project primarily consists of adding new colored concrete along the existing Highway 9 median between Coyne Valley Road and Revette Drive. Work will include excavating base course from the medians, pouring flat, colored concrete and providing traffic control during the project.
Sealed proposals for the project can be sent to the town clerk’s office at 150 Ski Hill Road. Applications are accepted until 10 a.m. on April 24.
A copy of the contract documents can be obtained from the Breckenridge Engineering Department at 1095 Airport Road. All questions must be submitted in writing to the town by 5 p.m. on April 21. Questions should be sent via email to Christopher McGinnis at firstname.lastname@example.org. All bids will be opened publicly.
A 5 percent bid bond is required from all applicants. Performance and payment bonds will be required of the successful bidder.
BRECKENRIDGE GRAND VACATIONS CLOSES SKI SEASON WITH TRADE ASSOCIATION NOMINATIONS
Local timeshare company Breckenridge Grand Vacations was recently named as a finalist in numerous award categories by the American Resort Development Association (ARDA) Award program.
Each year, ARDA, the trade association that represents the timeshare vacation ownership and resort development industry, hosts ARDA World, an annual gathering for timeshare professionals. Along with the annual conference, ARDA hosts an awards gala to recognize the best people, resorts and products in the timeshare industry.
The winning “ARDYs” will be revealed at the gala on April 15 at the Marriott World Center Resort in Orlando. All finalists in the competition are selected from hundreds of entries submitted by ARDA members and judged independently in a confidential judging process.
For BGV, best-of finalists include: in-house sales team, Eli Yoder (owner/customer service team member), Rob Catalano (technology project manager), Megan Heil (resort department manager) and Rick Marchiori (maintenance team member or manager).
BGV has won numerous ARDY Awards over the years, including the top award won by BGV’s marketing service team for best manager or team, along with best in-house sales team for BGV’s Grand Lodge on Peak 7.
Breckenridge Grand Vacation is the parent company of timeshare resorts across Breckenridge, including Gold Point Resort, Grand Timber Lodge, the Grand Lodge on Peak 7 and the new Grand Colorado on Peak 8.
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