Opening a small or medium-sized cannabis business requires capital. While federal legalization of marijuana is inching closer to reality, banks are finding it difficult to keep up with regulations within different states that are constantly changing.
That’s where financial players like Canna Business Resources, IMA Financial Group and Pelorus Equity Group come in, as they learned how to handle the changing regulatory tides.
While earlier this year the much-needed advice on how to raise enough capital to finance cannabis entrepreneurial endeavors was shared by many experts attending the Benzinga Cannabis Capital Conference in Miami, this fall’s gathering in Chicago will feature many more. Mark your calendars for September 13 and 14 and join us to meet a slew of marijuana industry power players, from whom you can learn a lot, and of course, see how large deals are really happening.
IMA Financial Group & Michael Hennessey
Michael Hennessey, national cannabis practice leader of risk management and wealth manager IMA Financial Group Inc., is returning to Benzinga’s fall event as one of the speakers. Hennessey joined IMA Financial in 2020 to lead the company’s expansion into cannabis, after holding a leadership role at ABD Insurance and Financial Services. While there, he served the cannabis sector as well as technology, real estate, and life science enterprises.
“Our goal is to provide owners and operators with information and infrastructure to best mitigate and transfer corporate risk,” Hennessey said back then. “We want to ensure clients are fully aware of what their insurance program covers but, more importantly, what is not covered and treat them like any other normalized industry from a process and resource perspective.”
Being still in its infancy, the cannabis industry needs quality services, Hennessey told Risk & Insurance’s Emma Brenner in an interview.
Touching on the issue of the instability at the federal level, he emphasized that “clients in the cannabis industry have traditionally been ignored or even avoided by insurance providers.”
Pelorus Equity Group & Financial Expert Rob Sechrist
Rob Sechrist, another speaker at the upcoming Benzinga event, is co-founder and president of Pelorus Equity Group, a company that provides real estate loans for cannabis businesses. He is also the financial expert behind The Pelorus Fund, a private mortgage real estate investment trust offering acquisition and bridge lending programs.
The firm has been involved in more than 5,000 transactions of varying size and complexity.
After reporting 434% growth year-over-year in 2021, $243 million assets under management and $193 million of equity, The Pelorus Fund kicked off 2022 strong.
In April, it wrapped up $77.3 million worth non-dilutive real estate debt financing with Harborside Inc. HBOR HBORF, ahead of loaning $11 million to Inkster Pine Park, a black-owned cannabis cultivator and processor in Michigan.
Moreover, Pelorus Equity Group recently closed an $11.8 million financing with Juva Life Inc.JUVA JUVAF 4VV, enabling it to further expand cannabis operations and further clinical research.
At Pelorus Equity Group Sechrist is in charge of the development of strategic alliances with both private and institutional investors as well as the formation of equity collaborations.
“The number one challenge in cannabis is that you must disclose to your investors that you’re originating the loans to cannabis use tenants,” Sechrist told Cannabis Industry Journal’s Aaron Green in an interview. “So, you must think your way through very carefully all the things that could potentially be an issue.”
Canna Business Resources LLC
Canna Business Resources LLC has the capital to provide customized financing solutions and support for cannabis and CBD businesses. From financing to processing solutions, and banking options, CBR seeks to help businesses where banks fail.
The privately funded, specialized debt fund provides loans up to $15 million as a bridge to an equity deal or a general working capital.
What CBR makes unique is that they “don’t dictate the use of the capital,” Andrew Fellus, CEO and founder, said earlier.
“CBR is extremely unique in the fact that we are able to lend to all asset classes,” Fellus continued. “We can tailor-fit a facility based on each individual customer and are not confined to lending to one specific asset class or vertical. We are a working capital lender, blending solutions that don’t permeate the equity of the business and its owners.”