Compliance & Legal | Smoke Profits

Regulatory Compliance Framework

We operate within a comprehensive compliance framework that exceeds industry standards and regulatory requirements.

SEC Compliance

All our investment offerings are structured in compliance with SEC regulations, including Regulation D exemptions for private placements to accredited investors.

Regulation D Rule 506(b) & 506(c) offerings
Form D filings for all offerings
Regular SEC correspondence
Independent audits

International Standards

Our international operations comply with local regulations in each jurisdiction, including GMP, GACP, and pharmaceutical manufacturing standards.

GMP (Good Manufacturing Practice)
GACP (Good Agricultural Practice)
ISO 9001 Quality Management
FDA/EMA guidelines adherence

Cannabis Regulations

We strictly operate within cannabis frameworks, ensuring all partners hold valid licenses and comply with local cannabis laws.

Licensed operator verification
Track-and-trace compliance
Product testing requirements
Packaging and labeling standards

Anti-Money Laundering (AML) & Know Your Customer (KYC)

We maintain rigorous AML and KYC procedures to ensure the integrity of our investor base and comply with financial regulations.

KYC Procedures

Our Know Your Customer process includes:

Identity Verification: Government-issued photo ID verification through secure third-party services
Address Confirmation: Utility bills or bank statements within the last 90 days
Accredited Investor Verification: Income statements, tax returns, or net worth documentation
Beneficial Ownership: Disclosure of all individuals with 25%+ ownership in entity investors
Ongoing Monitoring: Periodic re-verification and updates to investor information

AML Policies

Our Anti-Money Laundering program includes:

Transaction Monitoring: Automated systems to detect suspicious activity patterns
Sanctions Screening: Regular checks against OFAC, UN, and EU sanctions lists
PEP Screening: Politically Exposed Persons identification and enhanced due diligence
Suspicious Activity Reports: Prompt filing with FinCEN when required
Staff Training: Annual AML training for all employees

Investor Eligibility Requirements

Our investment opportunities are available exclusively to qualified accredited investors as defined by the Securities and Exchange Commission.

Individual Investors

To qualify as an accredited investor, an individual must meet ONE of the following criteria:

Option 1 - Income Test:

Individual income exceeding $200,000 in each of the two most recent years (or $300,000 jointly with spouse) and a reasonable expectation of reaching the same income level in the current year.

Option 2 - Net Worth Test:

Individual or joint net worth exceeding $1,000,000, excluding the value of primary residence.

Option 3 - Professional Certification:

Hold in good standing a Series 7, 65, or 82 license.

Entity Investors

The following entity types may qualify as accredited investors:

✓ Trusts with assets exceeding $5,000,000 not formed for the specific purpose of acquiring the securities
✓ Entities (corporations, LLCs, partnerships) with assets exceeding $5,000,000
✓ Investment Advisers registered with the SEC or state authorities
✓ Family Offices with assets under management exceeding $5,000,000
✓ Entities in which all equity owners are accredited investors

Verification Process: All investors must complete our verification process before gaining access to investment opportunities. This typically takes 1-2 business days after document submission. For questions about eligibility, please contact our team.

Risk Warning & Disclosures

Important Risk Notice

Investing in cannabis involves significant risks, including the potential loss of your entire investment. Before investing, you should carefully consider whether these investments are suitable for you in light of your financial condition, investment experience, and risk tolerance. Please read all offering documents carefully and consult with your legal, tax, and financial advisors.

Regulatory & Legal Risks

Cannabis remains illegal under U.S. federal law, creating legal uncertainties
State laws may change, affecting the legality of cannabis operations
International operations are subject to foreign regulatory changes
Banking and financial services for cannabis businesses remain restricted
Enforcement priorities of government agencies may shift

Market & Business Risks

The cannabis market is relatively new and highly volatile
Cultivation operations face risks including crop disease and climate events
Intense competition may affect profitability of portfolio companies
Product recalls or quality issues could impact operations
Limited operating history of many cannabis companies

Investment-Specific Risks

These are illiquid investments with no public market for resale
No guarantee of returns; past performance does not predict future results
Distributions are not guaranteed and may vary significantly
Valuation of cannabis companies is complex and uncertain
Investment lock-up periods restrict access to capital

Tax Considerations

U.S. Tax Code Section 280E may limit deductions for cannabis businesses
Tax treatment of cannabis investments is complex and evolving
State tax laws vary significantly and may change
International investors may face additional tax complexities
Consult a tax professional familiar with cannabis investments

Cannabis Legal Status Notice

Despite the legalization of cannabis in many U.S. states and international jurisdictions, cannabis remains a Schedule I controlled substance under the U.S. Controlled Substances Act. This creates a conflict between state and federal law. SMPR operates exclusively in jurisdictions where cannabis is legal under state or local law, and we only partner with fully licensed operators. However, investors should be aware that federal enforcement priorities may change, and this could impact the operations of portfolio companies and the value of investments.

We strongly recommend that all investors consult with legal counsel familiar with cannabis law before making an investment decision.