Med-X, a marijuana-based startup, is engaged in a public hearing this month before Administrative Law Judge Jason S. Patil. The hearings pertain to an attempt to raise capital that was described as the first ever Reg A+ investment crowdfunding round for the Cannabis industry. The proceedings are being held at the SEC Headquarters in DC.
The company initially tallied indications of interest from 1,176 investors for an estimated $3.7 million via a testing the waters campaign on StartEngine. The offer was subsequentially pulled from the site as Med-X’s had failed to file an annual report for the fiscal year the offering statement had been qualified – a requirement under Reg A+. Annual reports on Form 1-K must be filed within 120 calendar days after the end of the fiscal year covered by the report as mandated by law. Med-X then filed to raise capital under Reg D last November.
The outcome of the hearing should be telling as the SEC takes its enforcement role quite seriously. The hearings are open to the public and started this week. Proceedings are expected to continue on January 25th.
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