The first REIT targeting the cannabis market has launched in the US.
Inception REIT will provide real estate debt and equity to licensed medicinal and “adult-use” cannabis businesses.
Sponsored by the Inception Companies, a private opportunistic investment firm based in Los Angeles and London, the REIT intends to raise up to $50m and said it has already secured commitments from several “prominent real estate investors and executives”.
Although most US states have legalised some form of cannabis use – largely medicinally – and nine states have legalised recreational use, there is limited access to financing for cannabis-related businesses due to stricter federal law.
The Inception Companies said the lack of options meant businesses have to raise capital for real estate uses by selling equity or relying on short-term loans.
I-REIT will focus on real estate-based financing opportunities, including sale and leasebacks, senior debt originations and capital improvement financings on specialised commercial and industrial buildings.
It will target states with the fewest restrictions on cannabis use, starting with California.
Richard Acosta, chief executive of I-REIT, said: “I-REIT has the distinct opportunity to shape the real estate capital markets a time that the cannabis industry’s momentum is undeniable.”
Brent Cox, co-founder of I-REIT, added: “As cannabis continues to evolve as a natural plant-based medicine and adult-use consumer product, I-REIT is positioned to be the industry’s go-to real estate capital partner through bespoke debt and equity financings for cultivation, manufacturing, distribution and retail assets.”
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