Cannabis Real Estate Funding

Scythian Real Estate is a full-service real estate company that appeals to both experienced cannabis operators and seasoned investors in the untapped cannabis real estate market. Scythian works with cannabis companies that need assistance with raising capital, acquiring retail properties, and managing real estate assets.

Colorado Cannabis Operators Look to Raise Funds in Sale-Leaseback Transactions

When the Colorado legislature passed House Bill 1090 in November 2019, it set the stage for cannabis companies to gain access to financing from new sources. Prior to the passage of the law, Colorado marijuana businesses could only be owned by private companies with a limited number of owners. Once the law went into effect, however, publicly traded corporations and private funds could hold ownership stakes in Colorado cannabis businesses. This opened the door for publicly traded corporations outside Colorado to invest in local dispensaries with state licenses.

Despite the increased opportunities available to cannabis companies looking to operate in Denver, Aurora, Fort Collins, Pueblo, and elsewhere in Colorado, the reality is that most cannabis operators would still prefer to raise funds through sale-leaseback transactions. Randy Roberts, a partner at Scythian Real Estate, said that the Denver-based real estate investment company continues to generate interest from sophisticated cannabis operators who simply do not want to part with equity in their companies. Moreover, observed Roberts, it is still difficult for these types of businesses to raise money through traditional avenues because “not a lot of [financial] institutions are willing to do deals with cannabis companies.”

Scythian Real Estate Continues to Close Deals with Marijuana Businesses During COVID-19

Some marijuana dispensaries have been adversely affected by the coronavirus pandemic. In fact, more than a few smaller operators have been forced to temporarily close due to high operational costs. This is one reason why Scythian Real Estate prefers to work with well-established cannabis operators: these larger companies are less likely to be impacted by COVID-19 and can handle the increased costs of running their businesses during the pandemic. For investors in the Scythian Real Estate Fund, this is good news: the cannabis real estate fund has a deal pipeline that remains strong, with recent deals closed in North Dakota and Pennsylvania.

Additionally, when state governments responded to the pandemic by declaring dispensaries as “essential businesses” that could remain open despite stay-at-home orders, the move sent a powerful message to states where marijuana has not yet been legalized. According to Scythian Real Estate partner Randy Roberts, these other states may now feel more pressure to legalize cannabis for recreational and medical purposes as the marijuana industry becomes less stigmatized. Roberts noted that this could be extremely good news for investors in cannabis real estate funds that team up with “really well-capitalized, strong cannabis companies” because those companies are going to have opportunities to grow by expanding into new markets and by capturing additional customers in existing markets.

Scythian Is Preferred Cannabis Real Estate Partner of The Green Solution

Scythian Real Estate maintains an excellent working relationship with The Green Solution, which is one of the largest vertically integrated cannabis companies in the entire country. Scythian’s role in most of its deals is to identify, evaluate, acquire, and own real estate assets before leasing back those assets to The Green Solution. With added capital, The Green Solution is then in a better position to operate their retail dispensaries and to expand their operations into states where cannabis is medically and/or recreationally legal.

The Green Solution’s co-founder Kyle Speidell recently commented on the economic benefits of the cannabis company’s sale/leaseback deals with Scythian Real Estate: “It’s honestly a no-brainer economically.”

Contact Scythian Real Estate Today

If you are a cannabis operator looking to raise funds, or if you are an investor thinking about getting involved in the cannabis market, Scythian Real Estate Fund LLC may be able to assist you. To learn more, contact Scythian.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.