How to Invest in the Legal Marijuana Industry

History of the Legal Marijuana Industry

• The marijuana industry remains mostly in the shadows of American commerce, however, the passage of medical marijuana legislation in 23 states and of recreational marijuana laws in four states is attracting the attention of private equity investors, High Net Worth investors as well as individuals making the investment class a part of their overall, weighted investment strategy. Having these different investment groups simultaneously and actively investing in this industry is an important step in the evolution of the marijuana industry from emerging to developed.
• The legal marijuana industry is estimated to be worth between $2 billion and $3 billion and to date, 23 states, including California, and the District of Columbia have legalized medical marijuana. Four states — Colorado, Oregon, Washington and Alaska — also allow recreational marijuana use. The entire year of 2014 has been a tipping point.
• Despite states’ efforts to legalize medical or recreational cannabis, its use is illegal under federal law. Though recent legislation bars the feds from interfering with state medical marijuana laws, an assistant U.S. attorney wrote in a court filing last week that the plant is a psychoactive, addictive drug that is not accepted as safe for medical use. Those legal concerns — along with the drug’s social and political baggage — are factors that keep capital at bay. But in our homestate, California, voters will likely see a ballot measure to legalize recreational marijuana in 2016; more venture capital deals will be on the horizon.

How to Invest in the Legal Marijuana Industry?

Real Estate

• Among the safest of the cannabis investment train is real estate. Growers, dispensaries, laboratories all require real estate, either in long term leases or as acquisitions. Generally, the receipts that are generated from cannabis sales and production activities help to afford rent and mortgage payments at approximately 110% of market numbers; though quickly coming to an end, cannabis operators continue to pay a premium for a safe place to conduct their business.
• The lack of educated and agreeable real estate professionals, as well as providers (sellers) of the real estate, has created a bottle neck of available space in all states where cannabis is legal. Debtcraft regularly reviews real estate capital requests by cannabis operators and provides funding for acquisition, construction, tenant improvements—including the unique hardware and fixtures associated with cannabis.
• Debtcraft has high expertise in the real estate component of the legal marijuana industry. We are always looking for joining smart and savvy ganjaprenuers looking for real estate debt or equity.

Technology

• Investing in marijuana technology can be very exciting since the industry is rapidly looking for ways to better serve the community…a variety of technologies are well worth looking at, including testing devices and technology aimed at identifying the quality and character of the various strains that are being promoted for specific applications. Other technologies include delivery devices, extraction equipment and techniques as well as cultivation technologies that address inefficiencies in lighting and power use, exhaust and clean air requirements

How Do I Start the Process?

Debtcraft serves both avid investors seeking investment opportunities in this growing industry as well as cannabis entrpreneurs seeking partners, capital or advisory services. We first establish the need:

• What’s your investment time horizon?
• What’s your acceptable ROI?
• How much do you have to deploy?
• What’s your risk tolerance?
• Any useful expertise we can utilize?