In 2011 Debtcraft became acquainted with the legal marijuana business through its efforts to help raise capital for two public companies as well as provide debt and equity for an industrial real estate acquisition in Colorado. Since that time Debtcraft has steadily grown its capital base, intelligence and contacts and is able to play a relevant role in any cannabis related company. Our relationships and consultancy coupled with our capital is a great match for growing promising marijuana businesses.
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.
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.
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?
“Our brokerage firm has had an excellent experience and has successfully closed commercial loan deals with them since 2011. Our need to be able to fund our loans, especially our SECOND COMMERCIAL LOANS, as a skilled broker is critical for our success. We recommend Debtcraft without reservation and like how they are free to discuss the deal.”
Gary Pitts, MAE Capital
“Our team has been working with Michael and Richard for several years. Being in the commercial real estate industry, we thrive on networking and cultivating solid relationships. It has always been a pleasure to work with them, and they have also opened the doors to other business opportunities for us due to their extensive knowledge, vast connections and know-how. We wish them much continued success and hope and expect to collaborate on many more future ventures.”
Keith Lee, Managing Director, Crown Point Realty Capital
“Hey Guys! WE did it! We closed 22938 Hatteras – I couldn’t have done it without you jumping as high as I needed when it came to pulling the trigger on this deal! You guys shared my vision on this project and believed in it like I did. I wish all my investors were as easy to deal with as you guys! Plus, it’s nice to deal with those that follow through on what they promise! I’ll be calling you first on the next opportunity that comes my way. Thanks again.”
Jeff Schermer, Broker, Dilbeck Estates
“I am new to investing (though have what I think are considerable resources) and have spent a lot of time looking at different options, such as the stock market, business opportunities, etc. Most everything looked fine but rarely did i find a firm that was sophisticated and smart AND attentive and caring. This was (and is) important to me. I appreciate the time that everyone has taken with me to understand trust deeds, the SFR Venture Fund, etc. Looking forward to working with everyone again on the next suitable opportunity.”
Eda Ozsoy, Investor
I am happy to write on your wall of fame…
I operate mostly as an analyst, structuring debt and equity investment opportunities for my clients. From time to time I see a deal that needs a second opinion…usually a deal that is above my pay grade (hahaha)… I turn to you guys since TRUST is high and EXPERTISE and EXPERIENCE is abundant. Thanks for the years of collaboration and joint efforts. Have a great 2015!!”
Andrew Yim, Principal, Yim Ventures
“As a seasoned agent focusing on high-end real estate sales in the Los Angeles area, I come across many types of personalities. Picking quality relationships contributes greatly to my success, especially in the areas of finance. Debtcraft shines and sets itself apart. Michael and Richard are easy to work with and are results-oriented. They perform.”
Andrea P., Real Estate Agent, Beverly Hills, CA
“Having partnered with Michael and Richard for many years and knowing their business, personal integrity and successful work ethic, we jumped at the opportunity to co-invest with them in the SFR Venture Fund. Working with a team we trust was critical as we don’t have the time or resources for investment or financial mistakes.”
Jason & Joanna Frahm
How to Invest in the Legal Marijuana Industry?
Debtcraft can show you profitable ways to invest in the legal marijuana industry. Two examples are in Real Estate and Technology related to the business.