- Good Earth Organics (GEO) revenue grew 43% in 2019 to over $3 million, serving a broad base of individual consumers and hundreds of large-scale professional cannabis and hemp growers in the Emerald Triangle growing region
- GEO posted 49.75% revenue growth in 1H 2020 (unaudited) compared to 1H 2019 (audited) with improved COGS resulting in better gross profit (1H 2020 numbers reflected are subject to change pending audit)
- GEO soils and soil nutrients are blended from organic and natural ingredients that are sourced from around the globe and optimized for cannabis and hemp growing; the company has earned organic certifications from both OMRI & Clean Green (independent certifiers that test and approve soils for organic growing)
- The GEO team has grown up in the Emerald Triangle and have combined decades of growing organic gardens of toxin-free plants; the management team and owners are graduates of Stanford, Harvard, Harvard Business School, and Northwestern's Kellogg School of Management and have decades of experience in private equity and building companies at places such as Bear Stearns, Etsy, Indiegogo, and more.
- The potting soil market was over $1.5 billion in 2019 and the cannabis market it served generated over $13 billion across the 33 legal states (medical and/or recreational) in the U.S.
- Total Amount Raised: US $278,461
- Total Round Size: US $10,000,000
- Series A :
- Minimum Investment: US $1,000 per investor
- : Preferred Equity
- US $23,408,305 :
Organic Soils and Nutrients Optimized for Cannabis and Hemp:
- GEO produces and markets premium organic potting soils and nutrients, specially formulated to maximize cannabis and hemp flower growth due to their high mineral nutrient levels, high water-holding capacity, consistency, and optimized pH ranges.
- GEO proprietary soil blends have been approved for organic growing by OMRI and Clean Green. Plants grown with GEO products will be free from synthetic chemicals, inorganic pesticides, heavy metals, and other toxins that plants can absorb.
- Cannabis grown for resale must meet strict state testing requirements for purity. Because cannabis and CBD are ingested by eating, smoking, or vaping for medical and recreational purposes, it is critical plants be free of chemical, inorganic, and synthetic elements that can cause harm. Using GEO organic soils and nutrients helps ensure our customers pass state requirements for purity.
- Reputation. GEO premium organic potting soils and organic nutrients have been relied upon by cannabis and hemp growers in northern California and southern Oregon for over ten years, proving the efficacy of our formulations and reinforcing our brand as a producer of consistent and high quality organic growing media;
- Experience. The GEO management team is experienced at successfully introducing field-tested organic products to hemp and cannabis growers a customer base that demands soils and nutrients products that are (i) of the highest quality, (ii) consistently blended, and (iii) free from contaminants, inorganic additives, pesticides, and herbicides.
- Sourcing and Manufacturing. GEO has established a network of global suppliers (Asia, Americas) of high-quality, organic raw materials, enabling us to ensure Good Earth Organics products are certified organic and consistently blended.
Investors who invest $50,000 or less will have their securities held in trust with a Custodian that will serve as a single shareholder of record. These investors will be subject to the Custodian’s Account Agreement, including the electronic delivery of all required information.
SI Securities, LLC has the authority to prevent a closing from occurring if it determines, in its sole discretion, that this investment is no longer suitable at the time of the closing, which includes, but is not limited to, the Company raising at least US $500,000 in connection to the current round.
Reservation Bonus Perks:
All investors who reserve shares and purchase their reserved shares will receive a 50% discount code to purchase soil from our online store at www.goodearthorganics.com.
- Annual group voice call with management.
5 native trees planted -- National Forest Foundation.
Annual group video call with management.
25 native trees planted -- National Forest Foundation.
Spend a day with the team on a guided tour of the GEO Southern Oregon facilities.
- 100 native trees planted -- National Forest Foundation.
Note: Trees support wildfire recovery, improve water quality, and sequester carbon. For every $1 the National Forest Foundation invests in reforestation, the U.S. Forest Service provides $2 of value in project support and implementation.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
The graph below illustrates theor the of Good Earth Organics's prior rounds by year.
Retail sales of cannabis in the United States are expected to increase from $10.3 billion in 2018 to $29.7 billion by 2025 (New Frontier Data). The sale of cannabis for recreational purposes is now legal in 11 states and the District of Columbia and medical cannabis is legal in 33 states and the District of Columbia.
Retail sales of hemp, from which CBD oil is derived, is expected to increase from $0.6 billion in 2018 to $22 billion by 2025 (Brightfield Group). The Agriculture Improvement Act of 2018 (aka the "Farm Bill") legalized hemp farming nationally. Together, the U.S. cannabis and hemp markets served by Good Earth Organics are projected to grow from $10.9 billion in 2018 to $51.7 billion by 2025.
Growth in the cannabis and hemp supply sector is being driven both expanded consumer demand and by increasingly strict state and federal regulations. Accordingly, products containing cannabis or hemp-derived CBD oil require potting soils and soil nutrients that are free from impurities, toxins, artificial chemicals, and heavy metals that can harm consumers who ingest (eat, drink, tincture), smoke, or vape these products.
Correspondingly, the retail market for organic potting soil sold into cannabis and hemp-grower supply chains is anticipated to more than triple from $0.9 billion in 2019 to $3.3 billion by 2025 (Rand, Company estimates). Similarly, the industry for amendments added to the soil to address physical, chemical, and biological properties is projected to more than double from $3.7 billion in 2020 to $6.2 billion by 2025, with the organic segment growing the most quickly (MarketsandMarkets.com).
Reductions in future sales of our products will have an adverse effect on our profitability and ability to generate cash to fund our business plan.
The following factors, among others, could affect future market acceptance and profitability of our products:
- the introduction of competitive or alternative products;
- changes in customer preferences among alternative products;
- the level and effectiveness of our sales and marketing efforts;
- any unfavorable publicity regarding our brand;
- price increases resulting from rising commodity costs; and
- any changes in government policies and practices related to our products or those of our customers.
Adverse developments with respect to the production or sale of products could significantly reduce our net sales and profitability and have a material adverse effect on our ability to maintain profitability and achieve our business plan.
We expect our quarterly financial results to fluctuate.
We expect our net sales and operating results to vary significantly from quarter to quarter due to a number of factors, including changes in:
- annual farming production cycles;
- weather events and impacts;
- demand for our products and those of our customers;
- our ability to obtain and retain existing customers or encourage repeat purchases;
- our ability to manage our product inventory;
- general economic conditions;
- production costs, including raw material costs and availability;
- advertising and other marketing costs; and
- costs of creating and expanding product lines.
As a result of the variability of these and other factors, our operating results in future quarters may be below the expectations of public market analysts and investors.
We rely on other companies to provide materials for our products.
We depend on suppliers to meet our contractual obligations to our existing and future customers and to conduct our operations. Our ability to meet our obligations to our customers may be adversely affected if suppliers do not provide the agreed-upon supplies or perform the agreed-upon services in compliance with our requirements and in a timely and cost-effective manner. Our inability to preserve the expected economics could expose us to significant cost increases in future years, reducing profitability. Our suppliers may be less likely than us to be able to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where we may rely on only one or two distributors or suppliers for a particular material. The loss of one or more of our material suppliers and subcontractors could adversely affect our results and financial condition.
If we fail to increase brand awareness, it may have an adverse effect on our results of operations.
Due to a variety of factors, our opportunity to achieve and maintain a significant market share may be limited. Developing and maintaining awareness of our brand name, among other factors, is critical. Further, the importance of brand recognition will increase as competition in our market increases. Successfully promoting and positioning our brand, products and services will depend largely on the effectiveness of our marketing efforts. Therefore, we may need to increase our financial commitment to creating and maintaining brand awareness. If we fail to successfully promote our brand name or if we incur significant expenses promoting and maintaining our brand name, it may have a material adverse effect on our results of operations.
Our limited operating history makes it difficult for us to accurately forecast net sales and appropriately plan our expenses.
Although founded in 2008, we have a limited operating history under the current ownership and management team both in terms of the length of time we have been operating the business and the geographic scope of the business. There can be no assurance that we will be able to fully implement our business plan at reasonable costs or successfully operate. As a result, it is difficult to accurately forecast our net sales and plan our operating expenses. We base our current and future expense levels on our operating forecasts and estimates of future net sales. Net sales and operating results are difficult to forecast because they generally depend on the volume and timing of the orders we receive, which are uncertain. Some of our expenses are fixed, and, as a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected shortfall in net sales. This inability could cause our net income in a given quarter to be lower than expected. Since we have a limited operating history, we may not be profitable, and we may not be able to generate sufficient revenues to meet our expenses and support our anticipated activities. There are no assurances that we will be successful in raising additional capital if necessary or successfully developing and commercializing additional products. If we are not profitable in the future, the value of our preferred stock and common stock may be adversely affected.
We may not be able to obtain sufficient capital and may be forced to limit the scope of our operations.
As needed, if financing is unavailable at reasonable terms, we may be forced to modify our business plans accordingly. In connection with our growth strategies, we may experience increased capital needs. Accordingly, we may not have sufficient capital to fund our future operations without additional capital investments. There are no assurances that any additional financing will be available to us, or if available, will be on terms favorable to us.
We may lose access to the US banking system and capital markets based on our participation in an industry related to cannabis cultivation.
Under our current business model, The Good Earth Organics does not directly participate in the cultivation or distribution of cannabis. However, we do sell products to customers that are involved in this space. As a result, and despite recent rules issued by the United States Department of the Treasury mitigating the risk to banks who do business with cannabis companies permitted under state law, as well as recent guidance from the United States Department of Justice, we may lose access to the US banking system if banks become more wary to accept funds from businesses connected to the cannabis industry. Should we lose access to the US banking system, our operations would be materially harmed.
We may not successfully develop new product lines and products or improve existing product lines and products or maintain our effectiveness in reaching consumers through rapidly evolving communication vehicles.
Our future success depends on creating and successfully competing in markets for our products including our ability to improve our existing product lines and products and to develop and market new product lines and products to meet evolving grower needs, as well as our ability to leverage new media such as digital media and social networks to reach existing and potential consumers. We cannot be certain that we will be successful in developing and marketing new product lines and products or product innovations which satisfy consumer needs or achieve market acceptance, or that we will develop and market new product lines and products or product innovations in a timely manner. If we fail to successfully develop and market new product lines and products or product innovations, or if we fail to reach existing and potential consumers, our ability to maintain or grow our market share may be adversely affected, which in turn could materially adversely affect our business, financial condition and results of operations. In addition, the development and introduction of new product lines and products and product innovations require substantial research, development and marketing expenditures, which we may be unable to recoup if such new product lines, products or innovations do not achieve market acceptance.
Competition, particularly from companies with greater financial and marketing resources than ours, may adversely affect our distribution relationships and may hinder development of our existing markets, as well as prevent us from expanding our markets.
The supply sector to the cannabis industry is highly competitive. We will compete with other suppliers not only for industrial grower and consumer grower acceptance but also for shelf space and marketing focus in garden stores, farm stores and retail outlets, all of whom also will likely stock competing products. We do not have any exclusivity agreements or distribution agreements in place with any retailers. Our products will compete with a wide range of organic growing supplies, produced by a relatively large number of producers, many of which have substantially greater financial, marketing and distribution resources than ours.
Increased competitor consolidations, market-place competition, competitive product offerings and pricing pressures could impact our earnings, market share and volume growth. If, due to such pressure or other competitive threats, we are unable to sufficiently maintain or develop our distribution channels, we may be unable to achieve our revenue and financial targets. Competition, particularly from companies with greater financial and marketing resources than ours, could have a material adverse effect on our ability to establish and expand the market for our products.
Additionally, potential competitors could duplicate our business model and processes as there is no aspect of our business which is protected by patents.
Damage to our reputation or the reputation of our products or products we market on behalf of third parties could have an adverse effect on our business.
Maintaining our strong reputation and a strong reputation of our products with both growers and our retail customers is a key component in our success. Product recalls, our inability to ship, sell or transport affected products, governmental actions, investigations or other legal proceedings, and adverse media commentary may harm our reputation and hinder the acceptance by growers of our products. In addition to effects on grower behavior, retailers could decide to stop carrying those products which may materially and adversely affect our business operations, reduce sales, and increase costs.
In addition, claims or allegations that our products or products we market on behalf of third parties are not safe could adversely affect us and contribute to the risk we will be subjected to legal action. Public commentary by media agencies or non-governmental organizations and/or litigation-related assertions, even when such commentary or assertions may be inaccurate, may lead consumers or our retail customers to believe that certain of our products or products we market on behalf of third parties may be unsafe.
Even when inaccurate, claims and allegations that our products or products we market on behalf of third parties are not safe could impair our reputation, the reputation of our products or the reputation of products we market on behalf of third parties, involve us in litigation, damage our brand names and have a material adverse effect on our business.
Additionally, we cannot provide assurance that our internal controls and compliance systems will always protect us from acts committed by our employees, agents or business partners in violation of U.S. federal or state laws. Any improper acts or allegations could damage our reputation and subject us to civil or criminal investigations and related shareholder lawsuits, could lead to substantial civil and criminal monetary and non-monetary penalties, and could cause us to incur significant legal and investigatory fees.
The Company’s expansion into new, unfamiliar markets presents increased risks that may prevent it from being profitable in these new markets.
The Company intends to continue to expand nationally through a multi-prong strategy that may include the use of contract manufacturers, new distributors, retailers, online channels, acquisitions of competitors, and the opening of retail locations in new markets. As a result, the Company may have less familiarity with local consumer preferences and could encounter difficulties in attracting customers due to a reduced level of consumer familiarity with the Company’s brands. Other factors that may impact the Company’s ability to expand geographically and in new markets and operate the expanded business profitably, many of which are beyond the Company’s control, include:
the Company’s ability to identify suitable acquisition opportunities at purchase prices or terms that are attractive or acceptable to the Company or new locations, including the Company’s ability to gather and assess demographic and marketing data to determine consumer demand for the Company’s products in the locations the Company selects;
- the Company’s ability to negotiate favorable lease agreements;
- the Company’s ability to accurately assess the profitability of potential acquisitions or new locations;
- the Company’s ability to secure required governmental permits and approvals;
- the Company’s ability to hire and train skilled personnel;
- the Company’s ability to provide a satisfactory product mix that is responsive to the needs of its customers living in the targeted geographic areas;
- the Company’s ability to supply new retail locations with inventory in a timely manner;
- the presence of the Company’s competitors in the targeted markets;
- regional economic and other factors in the geographic areas in which the Company expands; and
- general economic and business conditions affecting consumer confidence and spending and the overall strength of the Company’s business.
Once the Company decides on a new market, any delays in acquiring, opening a new retail location, or securing the proper contract manufacturer, distributor, retailer or online channel to serve the identified new market could impact the Company’s financial results. It is possible that events, such as delays in the acquisitions process or construction delays caused by permitting or licensing issues, material shortages, labor issues, weather delays or other acts of God, discovery of contaminants, accidents, deaths or injuries could delay planned openings or force the Company to abandon planned openings altogether.
As the Company grows, the Company will face the risk that its existing resources and systems, including management resources, accounting and finance personnel and operating systems, may be inadequate to support its growth. There can be no assurance that the Company will be able to retain the personnel or make the changes in its systems that may be required to support its growth. Failure to secure these resources and implement these systems on a timely basis could have a material adverse effect on the Company’s results of operations. In addition, hiring additional personnel and implementing changes and enhancements to the Company’s systems will require capital expenditures and other increased costs that could also have a material adverse impact on the Company’s results of operations.
The Company’s expansion into new markets may also create new challenges including an increase in information to be processed by the Company’s information management systems and diversion of management attention from existing operations. To the extent that the Company is not able to meet these additional challenges, the Company’s sales could decrease, and the Company’s operating expenses could increase, which could have a material adverse effect on the Company’s business, financial condition and results of operations.
Finally, the size, timing, and integration of any future acquisitions or retail locations may cause substantial fluctuations in the Company’s results of operations from quarter to quarter. Consequently, the Company’s results of operations for any quarter may not be indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year. These fluctuations could have a material adverse effect on the Company’s business, financial condition and results of operations.
As a result of the above factors, there can be no assurance that the Company will be able to successfully expand to new markets on a profitable basis. The failure to successfully expand to new markets on a profitable basis could have a material adverse effect on the Company’s business, financial condition and results of operations.
We have plans to sell certain of our products over the internet through an online store and/or Amazon platform. If we are unable to effectively execute our e-commerce business, our reputation and operating results may be harmed.
We have plans to sell certain of our products over the Internet through an online store and/or Amazon platform. The success of our e-commerce business will depend on our investment in this platform, customer preferences and buying trends relating to e-commerce, and our ability to both maintain the continuous operation of our online store or platform and our fulfillment operations and provide a shopping experience that will generate orders and return visits to our online store or platform.
We are also vulnerable to certain additional risks and uncertainties associated with our e-commerce business, including: changes in required technology interfaces; website downtime and other technical failures; costs and technical issues associated with website software, systems and technology investments and upgrades; data and system security; system failures, disruptions and breaches and the costs to address and remedy such failures, disruptions or breaches; computer viruses; and changes in and compliance with applicable federal and state regulations. In addition, our efforts to remain competitive with technology trends, including the use of new or improved technology, creative user interfaces and other e-commerce marketing tools such as paid search and mobile applications, among others, may increase our costs and may not increase sales or attract customers. Our failure to successfully respond to these risks and uncertainties might adversely affect the sales of our e-commerce business, as well as damage our reputation and brands.
Additionally, the success of our e-commerce business and the satisfaction of our customers depend on their timely receipt of our products. The efficient delivery of our products to our consumers will require that our distribution centers have adequate capacity to support the level of e-commerce operations and any anticipated increased levels that may occur as a result of the growth of our e-commerce business in the future. If we encounter difficulties with our distribution centers, or if any distribution centers shut down for any reason, including as a result of fire or other natural disaster, we could face shortages of inventory, resulting in out of stock conditions in our online store, and we could incur significantly higher costs and longer lead times associated with distributing our products to our consumers and experience dissatisfaction from our consumers. Any of these issues could have a material adverse effect on our business and harm our reputation.
We may not obtain insurance coverage to adequately cover risk exposures.
We may be exposed to liabilities that are unique, and currently unforeseen, to the products we provide. It is not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our operations and financial condition.
There is uncertainty around the duration and breadth of the COVID-19 pandemic, and as a result the ultimate impact on our business, financial condition or operating rules cannot be reasonably estimated at this time.
In December 2019, a novel strain of coronavirus, or COVID-19, was reported to have surfaced in Wuhan, China. COVID-19 has spread to many countries, including the United States, and was declared to be a pandemic by the World Health Organization. Efforts to contain the spread of COVID-19 have intensified and United States, Europe and Asia have implemented severe travel restrictions and social distancing. The impacts of the outbreak are unknown and rapidly evolving. A widespread health crisis has adversely affected and could continue to affect the global economy, resulting in an economic downturn that could negatively impact the value of our shares and investor demand for our shares generally.
The continued spread of COVID-19 has also led to severe disruption and volatility in the global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets in the future. It is possible that the continued spread of COVID-19 could cause a further economic slowdown or recession or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition.
The extent to which COVID-19 affects our financial results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 outbreak and the actions to contain the outbreak or treat its impact, among others. Moreover, the COVID-19 outbreak has had, and may continue to have, indeterminable adverse effects on general commercial activity and the world economy, and our business and results of operations could be adversely affected to the extent that COVID-19 or any other pandemic harms the global economy generally.
Our products are marketed and may be purchased for use in new and emerging markets, including the cannabis market. Cannabis cultivation, possession, and use are currently illegal under federal law, and any change in the enforcement priorities of the federal government could render our current or planned future operations unprofitable.
A meaningful portion of our customers operate in the cannabis industry, which is dependent on state laws and regulations pertaining to such industry; however, under federal law, cannabis cultivation, possession, and use remain illegal.
The United States federal government regulates drugs through the Controlled Substances Act (the “CSA”), which places controlled substances, including cannabis, on one of five schedules. Cannabis is currently classified as a Schedule I controlled substance, which is viewed as having a high potential for abuse and having no currently accepted medical use in treatment in the United States. No prescriptions may be written for Schedule I substances, and such substances are subject to production quotas or bans imposed by the United States Drug Enforcement Administration (the “DEA”). Because of this regulation, doctors may not prescribe cannabis for medical use under federal law, although they can recommend its use under the First Amendment.
Currently, 33 U.S. states, the District of Columbia and the U.S. territories of Guam and Puerto Rico have passed legislation allowing for the use of medical cannabis. Additionally, 11 states and the District of Columbia have legalized cannabis for adult recreational use. Such state and territorial laws are in conflict with the federal CSA, which makes cannabis use and possession illegal at the federal level. Because cannabis is a Schedule I controlled substance, however, the development of a legal cannabis industry under the laws of these states is in conflict with the CSA, which makes cannabis use and possession illegal at the federal level. The United States Supreme Court has confirmed that the federal government has the right to regulate and criminalize cannabis, including for medical purposes, and that federal law criminalizing the use of cannabis preempts state laws that legalize its use.
In light of such conflict between federal laws and state laws regarding cannabis, the previous administration under President Obama had effectively stated that it was not an efficient use of resources to direct law federal law enforcement agencies to prosecute those lawfully abiding by state-designated laws allowing the use and distribution of medical and/or recreational cannabis. For example, the prior Department of Justice (“DOJ”) Deputy Attorney General of the Obama administration, James M. Cole, issued a memorandum (the “Cole Memo”) to all United States Attorneys providing updated guidance to federal prosecutors concerning cannabis enforcement under the CSA (see “Business—Government and Industry Regulation—The Cole Memo”). In addition, the Financial Crimes Enforcement Network (“FinCEN”) provided guidelines (the “FinCEN Guidelines”) on February 14, 2014, regarding how financial institutions can provide services to cannabis-related businesses consistent with their Bank Secrecy Act (“BSA”) obligations (see “Business—Government and Industry Regulation—FinCEN”).
In 2014, the United States House of Representatives passed an amendment (the “Rohrabacher-Blumenauer Amendment”) to the Commerce, Justice, Science, and Related Agencies Appropriations Bill, which funds the United States DOJ. The Rohrabacher-Blumenauer Amendment prohibits the DOJ from spending funds to interfere with the implementation of state medical cannabis law. In August 2016, the Ninth Circuit Court of Appeals ruled in United States v. McIntosh that the Rohrabacher-Blumenauer Amendment bars the DOJ from spending funds on the prosecution of conduct that is allowed by state medical cannabis laws, provided that such conduct is in strict compliance with applicable state law. In March 2015, bipartisan legislation titled the Compassionate Access, Research Expansion, and Respect States Act (the “CARERS Act”) was introduced, proposing to allow states to regulate the medical use of cannabis by changing applicable federal law, including by reclassifying cannabis under the CSA to a Schedule II controlled substance and thereby changing the plant from a federally-criminalized substance to one that has recognized medical uses. More recently, the Respect State Marijuana Laws Act of 2017 has been introduced in the U.S. House of Representatives, which proposes to exclude persons who produce, possess, distribute, dispense, administer or deliver marijuana in compliance with state laws from the regulatory controls and administrative, civil, and criminal penalties of the CSA.
These developments previously were met with a certain amount of optimism in the cannabis industry, but (i) neither the CARERS Act nor the Respect State Marijuana Laws Act of 2017 have yet been adopted, (ii) the Rohrabacher-Blumenauer Amendment, being an amendment to an appropriations bill that must be renewed annually, has not currently been renewed beyond September 30, 2019, and (iii) the ruling in United States v. McIntosh is applicable precedent only in the Ninth Circuit, which covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, and the Northern Marianas Islands.
On January 4, 2018, the U.S. Attorney General, Jeff Sessions, issued a memorandum for all U.S. Attorneys (the “Sessions Memo”) stating that the Cole Memo was rescinded effectively immediately. In particular, Mr. Sessions stated that “prosecutors should follow the well-established principles that govern all federal prosecutions,” which require “federal prosecutors deciding which cases to prosecute to weigh all relevant considerations, including federal law enforcement priorities set by the Attorney General, the seriousness of the crime, the deterrent effect of criminal prosecution, and the cumulative impact of particular crimes on the community.” The Sessions Memo went on to state that given the DOJ’s well-established general principles, “previous nationwide guidance specific to marijuana is unnecessary and is rescinded, effective immediately.”
It is unclear at this time whether the Sessions Memo indicates that the Trump administration will strongly enforce the federal laws applicable to cannabis or what types of activities will be targeted for enforcement. However, a significant change in the federal government’s enforcement policy with respect to current federal laws applicable to cannabis could cause significant financial damage to us. As our business plan is primarily focused on supporting growers who cultivate cannabis, we would likely be irreparably harmed by a change in enforcement policies of the federal government depending on the nature of such change.
Continued legislative authorization of cannabis at the state level cannot be assured, and a slowing or halting of progress in this area may have a negative impact on us.
Our products are sold to growers of various crops, including cannabis. Disruption to the cannabis industry could cause some potential customers to be more reluctant to invest in growing cannabis. Continued development of the cannabis industry is dependent upon continued legislative authorization of cannabis at the state level. Any number of factors could slow or halt progress in this area. Further, progress in the cannabis industry is not assured. Numerous factors impact the legislative process. Any one of these factors could slow or halt use of cannabis, which would negatively impact our current operations and/ or growth of our business.
Laws and regulations affecting the recreational and medical sector of the cannabis industry are constantly changing, which could detrimentally affect our current or proposed operations.
Local, state, and federal recreational and medical cannabis laws and regulations are broad in scope and subject to evolving interpretations, which could require our customers and/or us to incur substantial costs associated with compliance or alter our business plan. In addition, violations of these laws, or allegations of such violations, could disrupt our business and/or that of our customers and result in a material adverse effect on our operations. In addition, it is possible that regulations may be enacted in the future that will be directly applicable to our current or proposed business or that of our customers. We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business or that of our customers.
There can be no assurance that our operations will not violate state or federal law.
We have not requested nor obtained any opinion of counsel or ruling from any authority to determine if our operations are in compliance with or violate any state or federal laws or whether we are assisting others to violate a state or federal law. In the event that our operations are deemed to violate any laws, or if we are deemed to be assisting others to violate a state or federal law, we could have liability that could cause us to modify or cease our operations.
*Please refer to Offering Circular for full list of Risk Factors
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a "liquidation event" occurs. A "liquidation event" is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company's board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC ("SI Advisors") Representatives of SI Securities, LLC are affiliated with SI Advisors, LLC ("SI Advisors"). SI Advisors is an exempt investment advisor that acts as the General Partner of SI Selections Fund I, L.P. ("SI Selections Fund"). SI Selections Fund is an early stage venture capital fund owned by third-party investors. From time to time, SI Selections Fund may invest in offerings made available on the SeedInvest platform, including this offering. Investments made by SI Selections Fund may be counted towards the total funds raised necessary to reach the minimum funding target as disclosed in the applicable offering materials.
Frequently Asked Questions
"The SEC has qualified this offering" means the SEC has permitted Good Earth Organics to offer for sale the securities described in the Offering Circular to investors such as you. The SEC is not judging the merits, accuracy, or completeness of the offering and information in the Offering Circular.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Good Earth Organics. Once Good Earth Organics accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Good Earth Organics in exchange for your securities. At that point, you will be a proud owner in Good Earth Organics.
Preferred equity is usually issued to outside investors and carries rights and conditions that are different from that of common stock. For example, preferred equity may include rights that prevent or minimize the effects of dilution or grants special privileges in situations when the company is sold.
A convertible note is a unique form of debt that converts into equity, usually in conjunction with a future financing round. The investor effectively loans money to a startup with the expectation that they will receive equity in the company in the future at a discounted price per share when the company raises its next round of financing.
To learn more about startup investment types check out “How to Choose a Startup Investment” in our academy.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or passport
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
Until a closing occurs, you may cancel your investment at any time, for any reason. You will receive an email when the closing occurs and your securities have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page by clicking your profile icon in the top right corner.
Currently there is no market or liquidity for these securities. Right now Good Earth Organics does not plan to list these securities on a national exchange or another secondary market. At some point Good Earth Organics may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Good Earth Organics either lists their securities on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement.
This is Good Earth Organics's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. You will also find a copy of the Good Earth Organics's Offering Circular, which has been qualified by the SEC. The Offering Circular includes important details about Good Earth Organics's fundraise that you should review before investing.
This investment is highly speculative and should not be made by anyone who cannot afford to risk the entire investment amount. In addition to these risks, you should carefully consider the specific information and risks disclosed in Good Earth Organics’s profile and Offering Circular.