Exhibit 4.1


 


Description of Securities of Medicine
Man Technologies, Inc. 


Registered Pursuant to Section 12 of
the Securities Exchange Act of 1934


 


General


 


The following is a summary of information concerning the capital
stock of Medicine Man Technologies, Inc. (hereinafter referred to as the “Company”, “our” and “we”).
The summaries and descriptions below do not purport to be complete. It is subject to and qualified in its entirety by reference
to our Articles of Incorporation, as amended (the “Articles of Incorporation”), and our Amended and Restated Bylaws
(the “Bylaws”), each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which
this Exhibit 4.1 is a part. We encourage you to read our Articles of Incorporation, including the Certificate of Designation (as
defined below), our Bylaws and any applicable provisions of relevant law, including the Nevada Revised Statutes. Our Common Stock
(as defined below) is our only security registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.


 


Common Stock


 


Authorized Shares. The Company is authorized to issue
up to 250,000,000 shares of common stock, par value $0.001 per share (the “Common Stock”).


 


Dividends. Holders of shares of Common Stock are entitled
to receive dividends when, as and if declared by the Company’s Board of Directors (the “Board”) out of funds
legally available for that purpose, subject to the rights of holders of any class or series of preferred stock, including our Series
A Preferred Stock (as defined below), which may then be outstanding. The Company has not declared or paid any cash dividends on
its Common Stock, and the Company does not anticipate doing so in the foreseeable future.


 


Voting Rights. Each share of Common Stock is entitled
to one vote on all matters submitted to a vote of the Company’s shareholders, including as to the election of directors to
the Board. Shareholders are prohibited from cumulating their votes in any election of directors of the Company.


 


Liquidation Rights. In the event of any liquidation,
dissolution, or winding up of the Company, subject to the rights of creditors and the holders of any outstanding shares of preferred
stock having a preference, including our Series A Preferred Stock, holders of shares of Common Stock are entitled to ratable distribution
of the remaining assets available for distribution to shareholders.


 


Redemption. The shares of Common Stock are generally
not subject to redemption by operation of a sinking fund or otherwise; provided, however, so long as the Company holds (directly
or indirectly) a license from a governmental agency to conduct its business, if such license is conditioned upon some or all of
the holders of the Company possessing certain qualifications, then, the Company, in its sole option and sole discretion, may redeem
the shares of Common Stock held by a holder that is deemed unsuitable or disqualified to own a direct or indirect interest in the
Company by such license granting governmental agency.


 


Preemptive Rights. Holders of shares of Common Stock
are not currently entitled to preemptive rights.


 


Fully Paid. The issued and outstanding shares of Common
Stock are fully paid and non-assessable. This means the full purchase price for the outstanding shares of Common Stock has been
paid and the holders of such shares will not be assessed any additional amounts for such shares. Any additional shares of Common
Stock that the Company may issue in the future will also be fully paid and non-assessable.


 


Listing and Ticker Symbol. The Common Stock is currently
quoted on the OTCQX under the ticker symbol “SHWZ.”


 


 


 






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Preferred Stock


 


Authority to Designate and Issue Shares of Preferred Stock.
Subject to limitations prescribed by Nevada law, without vote or action by our stockholders, the Board is authorized to determine
and alter the right, preferences, privileges and restrictions granted and imposed upon any wholly unissued series of preferred
stock, and to fix the number and designation of shares of any series of preferred stock. The Board also may increase or decrease
the number of shares of any series of preferred stock, but not below the number of shares of that series then outstanding, without
any further vote or action by our stockholders. The Board may authorize the issuance of preferred stock with rights, such as voting
or conversion rights, that could adversely affect the rights of the holders of the Common Stock. The issuance of preferred stock,
while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have
the effect of delaying, deferring or preventing a change in control of our company.


 


Authorized Shares. The Company is authorized to issue
up to 10,000,000 shares of preferred stock, par value $0.001 per shares. The Company has designated 110,000 shares of preferred
stock as Series A Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”) pursuant to the Certificate
of Designation of Series A Cumulative Convertible Preferred Stock filed with the Nevada Secretary of State on December 16, 2020
and amended on March 1, 2021 (the “Certificate of Designation”).


 


Dividends. Holders of Series A Preferred Stock are entitled
to receive cumulative dividends at the rate of 8% per annum on the “Preference Amount,” which initially is equal to
$1,000 per share and subject to increase, payable annually on each anniversary of the date of the first issuance of any shares
of Series A Preferred Stock to holders of record on each such payment date, by having such dividends automatically accrete as of
each dividend payment date to, and increase, the outstanding Preference Amount.


 


Liquidate Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company, holders of Series A Preferred Stock are entitled to be paid
out of the Company’s assets available for distributions to its stockholders, before any payment shall be made to the holders
of any junior securities, such as the Common Stock, an amount in cash equal to the Preference Amount (plus the pro rata portion
of the next dividend, if any), for each share of Series A Preferred Stock. In connection with a Change of Control Transaction (as
defined in the Certificate of Designation), either the Company or holders of Series A Preferred Stock holding no less than a majority
of the then-issued and outstanding shares of Series A Preferred Stock may elect to treat such Change of Control Transaction as
a liquidation and to receive the cash or the value of the property, rights or securities paid or distributed to holders of Series
A Preferred Stock in such Change of Control Transaction. Generally, a Change of Control Transaction means the occurrence of any
of: (i) the acquisition by a person or group through a purchase, merger or other acquisition transaction or series or related transactions,
in which such transaction or transactions are with the Company or approved by the Board, entitling that person or group to exercise
more than a majority of the total voting power of all shares of the Company entitled to vote generally in the election of directors
(including all securities such person has the right to acquire), (ii) a merger or consolidation involving the Company and, after
giving effect to such transaction, the Company’s stockholders immediately before such transaction own less than a majority
of the Company’s aggregate voting power the successor entity of such transaction immediately after such transaction, (iii)
a sale, lease or transfer of all or substantially all of the Company’s assets and the Company’s stockholders immediately
before such transaction own less than a majority of the aggregate voting power of the acquiring entity immediately after such transaction,
or (iv) the Common Stock ceases to be listed on a Trading Market (as defined in the Certificate of Designation).


 


Conversion by Holders. Each share of Series A Preferred
Stock will be convertible at the option of the holder thereof (i) for 90 days after the occurrence of a Listing Event (as defined
in the Certificate of Designation), (ii) on the date of the consummation of a Change of Control Transaction if requested within
14 days after delivery to holders of a notice of an anticipated Change of Control Transaction, (iii) for 10 days after the receipt
by the holders of a notice of forced redemption by the Company, and (iv) at any time after the first anniversary of the date of
the first issuance of any shares of Series A Preferred Stock, in each case, into that number of shares of Common Stock determined
by dividing the Preference Amount (plus the pro rata portion of the next dividend, if any) of such share of Series A Preferred
Stock by $1.20. Generally, a Listing Event involves the listing of the Common Stock on the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market or the New York Stock Exchange followed within 90 days thereafter by a public offering
of Common Stock that generates gross proceeds to the Company of no less than $100,000,000.


 


Conversion by the Company. The Company may force conversion
of the Series Preferred Stock (i) within 90 days after the occurrence of a Listing Event, and (ii) on the date of the consummation
of a Change of Control Transaction if requested within 14 days after delivery to holders of a notice of an anticipated Change of
Control Transaction, other than a Change of Control Transaction as a result of the Common Stock ceasing to be listed on any Trading
Market.


 


 


 






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Redemption Rights. Each share of Series A Preferred Stock
will be redeemable at the option of the holder thereof (i) for 90 days after the occurrence of a Listing Event, (ii) at any time
after the fifth anniversary of the date of the first issuance of any shares of Series A Preferred Stock, (iii) on the date of the
consummation of a Change of Control Transaction if requested within 14 days after delivery to holders of a notice of an anticipated
Change of Control Transaction, or (iv) for five days after the receipt by the holder of a notice of forced conversion by the Company.
In each case, a holder of Series A Preferred Stock may elect to have the Company redeem all or any portion of the shares of Series
A Preferred Stock held for a redemption price per share equal to the Preference Amount (plus the pro rata portion of the next dividend,
if any). The Company has a right to defer such redemption one or more times until no later than the one year anniversary of the
redemption date originally requested by the holder, provided that the dividends rate would be increased from 8% to 10% per annum
during the first six months of such deferral period and 15% thereafter, if applicable. In addition, the Company may redeem all
or any portion of the Series A Preferred Stock within 90 days after the occurrence of a Listing Event.


 


Cannabis Law Compliance and Unsuitability Redemption.
Each holder of Series A Preferred must take all action reasonably required by such holder to comply with applicable state cannabis
laws and regulations, including, without limitation, making all requisite filings under such laws and regulations as and when required.
The Company has the right but not the obligation to redeem all or any portion of the shares of Series A Preferred Stock held by
any holder that is determined to be unsuitable or disqualified to own a direct or indirect interest in the Company by a state governmental
authority, including, without limitation, the Colorado Marijuana Enforcement Division.


 


Ranking. With respect to conversion rights, redemption
payments and rights upon the Company’s liquidation, dissolution or winding-up or a Change of Control Transaction, the Series
A Preferred Stock rank junior to the Company’s indebtedness and any securities the Company issues in the future the terms
of which expressly make such securities senior to the Series A Preferred Stock, on a parity with any securities the Company issues
in the future the terms of which expressly make such securities on a parity with any or all of the Series A Preferred Stock, but
senior to the Common Stock and any securities the Company issues in the future that are not expressly made on a parity or senior
to the Series A Preferred Stock.


 


Voting Rights. Each holder of Series A Preferred Stock
will be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Series
A Preferred Stock held would convert into as of the record date for determining stockholders entitled to vote on any matter presented
to the Company’s stockholders for their action or consideration at any meeting (or by written consent in lieu of meeting)
voting together with the holder of Common Stock as a single class as if such shares of Series A Preferred Stock were convertible
as of such date.


 


Action by Written Consent.


 


The Bylaws provide that holders holding a majority of the voting
power of each class of capital stock of the Company, or, if different, the proportion of voting power required to take such action
at a meeting of stockholders.


 


Certain Anti-Takeover Measures


 


Under our Articles of Incorporation, the Board, without further
vote by our stockholders, has the authority to issue shares of preferred stock and to determine the rights and preferences, price
and restrictions, including but not limited to voting and dividend rights, of any such shares of preferred stock. The issuance
of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among
other things, have the effect of delaying, deferring or preventing a change in control of our company.


 


 


 






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The Bylaws contain provisions that may be deemed to have an
anti-takeover effect and may del, defer or prevent a change of control. These provisions include:


 


Staggered Board of Directors.
The Bylaws provide for a “staggered” or “classified” Board, whereby the directors of the Board are divided
into two classes - Class A Directors consisting of one-half of the members of the Board, and Class B Directors consisting of one-half
of the members of the Board. Each class shall be elected for two-year terms, in alternating years.


 


Change in the Number of Directors.
The Bylaws provide that approval by no less than four members of the Board is required to change the total number of directors
comprising the Board.


 


Bankruptcy, Insolvency, Dissolution
or Liquidation. The Bylaws provide that approval by no less than four members of the Board is required to commence any
bankruptcy or insolvency proceeding, or to dissolve or liquidate or agree to dissolve or liquidate the Company.


 


Transfer Agent


 


The Company’s Transfer Agent is Globex Transfer, LLC.


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 






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