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CrowdGather: An Emerging Nexus for Digital Cannabis

Thomas Mitchell

June 1st, 2015

News, Top News

Paul Graham, a famous venture capitalist and founder of YCombinator, once summarized a good start-up founder in two words – relentlessly resourceful.

CrowdGather Inc. (OTC: CRWG) became a publicly traded company in early-2008 shortly before the global economic crisis placed a devastating blow on the financial markets. With a limited ability to raise capital, the company was forced to keep its cash burn low and find innovative ways to build long-term value and stay alive. The relentless resourcefulness of CEO Sanjay Sabnani and his team ultimately kept the company alive, and now, prepared it to thrive.

The company began to change its tune in 2013 and 2014 after the economic recovery truly began to take hold and capital became easier to raise. In May of 2014, the company sold its flagship PBNation.com forum and other assets to VerticalScope and acquired Plaor – a developer of highly scalable multi-platform games – which generated $690,507 in revenue at an attractive 75% gross margin, as of the three months ended January 31, 2015.

High Potential

CrowdGather’s increasing revenue has provided management with the opportunity to expand its presence into new industries. In particular, management is eyeing the tremendous growth happening within the U.S. cannabis industry, which could reach $35 billion in size by 2020 if all 50 states legalized the drug, according to GreenWave Advisors. Even assuming a more modest legalization scenario, the industry could still surpass $20 billion in size by 2020.

In early April, the company announced the acquisition of WeedTracker.com and other assets, including DispensaryWeed.com and WeedinHollywood.com. WeedTracker.com pre-dates many other popular canna-tech companies in the space, including Leafly and MassRoots Inc. (OTC: MSRT), having been established in 2005. By leveraging its existing tech expertise, management hopes to leverage the online community into a fully-featured mobile industry tracking franchise.

The company also plans on building out WeedinHollywood.com into its first cannabis themed gaming title through its Plaor subsidiary. With the growing popularity of cannabis media, as evidenced by DigiPath Inc.’s (OTC: DIGP) The National Marijuana News and other publications, a move into the gaming industry could generate significant attention and ultimately help improve its number of monthly active users on its platforms.

The canna-tech industry is particularly attractive because it provides access to the industry’s tremendous growth rates without the risk of directly participating in highly regulated activities. After all, marijuana remains a Schedule I Controlled Substance on a federal level, even though states have essentially been green-lighted by federal judiciary agencies. The tech industry also benefits from strong underlying growth trends compared to other industries.

Powering Start-ups

CrowdGather’s goals are much larger than simply becoming another publishing network and app provider within the cannabis industry – it hopes to become a nexus for the entire digital cannabis movement. In late-May, the company announced plans to design a crowdfunding platform focused on cannabis and digital start-ups that it intends to launch on CrowdGather.com in 2016. The network will be designed to help start-ups in the space raise capital from a large investor network.

After three years, the Securities & Exchange Commission’s crowdfunding mandate is finally coming to fruition. The plans are in place to finalize the Title III Equity Crowdfunding rules and the Title IV Regulation A+ rules from the JOBS Act by October of 2015. With an additional 60 day holding period before going into law, experts are predicting that crowdfunding will be in full swing by early 2016, creating significant opportunities in helping start-ups.

Title III of the JOBS Act enables small businesses to use online crowdfunding portals to sell equity in their businesses to the general public – not just Wall Street or wealthy investors – and raise up to $1 million in capital. Title IV enables small or emerging business to raise up to $50 million from the same group of people through a relatively inexpensive form of a public offering, which has generated even more excitement among investors.

CrowdGather plans on joining companies like CannaFundr – an online community of curated investment opportunities for accredited investors – in connecting start-ups with the capital needed to succeed. In doing so, investors will have many more opportunities than small publicly traded companies, like Cannabis Science Inc. (OTC: CBIS) or Hemp Inc. (OTC: HEMP). However, its business will target much more than accredited investors in 2016.

Looking Ahead

CrowdGather has demonstrated its ability to survive complete cycles in two separate digital businesses – publishing and gaming – and along the way, it has acquired the experience to grow these businesses with a discipline towards increasing revenue. The move into the cannabis sector will create a promising combination of an app developer – similar to MassRoots – and crowdfunding entity – similar to CannaFundr – capitalizing on two enormous opportunities.

For more information, visit the company’s website at www.crowdgather.com.

This article was published by CFN Enterprises Inc. (OTCQB: CNFN), owner and operator of CFN Media, the industry’s leading agency and digital financial media network dedicated to the burgeoning CBD and legal cannabis industries. Call +1 (833) 420-CNFN for more information.

About Thomas Mitchell

Mr. Mitchell has over a decade of experience in the financial markets as both a private investor and financial journalist.

Disclaimer: Except for the historical information presented herein, matters discussed in this article contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may from time to time have a position in the securities mentioned herein and will increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice and that of their own professional advisers. Emerging Growth LLC dba TDM Financial, which owns CannabisFN, may be compensated for its Services in the form of cash-based and/or equity- based compensation in the companies it writes about, or a combination of the two. For full disclosure please visit: https://www.cannabisfn.com/legal-disclaimer/.

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About CFN Media Group

CFN Enterprises Inc. (OTCQB: CNFN) owns and operates CFN Media Group, the premier agency and financial media network reaching executives, entrepreneurs and consumers worldwide. Through its proprietary content creation, video library, and distribution via www.CannabisFN.com, CFN has built an extensive database of cannabis interest, assisting many of the world’s largest cannabis firms and CBD brands to build awareness and thrive. For more information, please visit www.cfnenterprisesinc.com.

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