Cannabis Real Estate Investing
What Is Scythian Cannabis Real Estate?
Scythian Real Estate Fund is a cannabis real estate investment firm that focuses on acquiring real estate used primarily for cannabis dispensaries. Scythian serves as a source of expansion capital to state-licensed cannabis operators, who are able to use the proceeds from the real estate sale to bolster their core operations, make capital improvements to the properties, and fund expansion into new cannabis markets. Scythian’s cannabis real estate portfolio currently includes 23 properties in three (3) states where marijuana is legal for either recreational use or medical use. The Scythian Real Estate Fund generates strong, steady revenue by leasing the properties in the portfolio back to the cannabis companies.
The Scythian executive team has roughly 50 years of combined experience in the real estate and investment fields. Scythian partners Ryan Arnold and Randy Roberts have been able to leverage their vast knowledge, expertise, and connections in the real estate market to build a premier cannabis real estate portfolio that includes properties in key cannabis markets across the United States.
Scythian Partners with Top Cannabis Companies in the U.S.
Scythian is the preferred real estate partner of The Green Solution (TGS), which was acquired by Columbia Care. TGS is one of the country’s largest and most successful vertically integrated cannabis companies, with ownership of numerous retail dispensaries, as well as multiple high-quality marijuana cultivation and manufacturing facilities. The partnership between Scythian and Colorado-based TGS has helped Scythian to build a premier single-tenant real estate portfolio spread across Colorado. Scythian provides premier cannabis companies like TGS with real estate capital solutions by purchasing a real estate asset and then leasing it back to the cannabis company for use as a retail marijuana dispensary in what is known as a “sale-leaseback transaction.” Most of Scythian’s cannabis real estate acquisitions are sale-leaseback deals.
Scythian works almost exclusively with cannabis companies that are engaged in the retail sale of marijuana in the United States. Many cannabis operators find that they need assistance with identifying, financing, and acquiring real estate so that they have a space in which to operate their businesses. That is where Scythian Real Estate Fund steps in. If a cannabis company already owns the property on which they operate, Scythian is able to provide the company with capital improvement financing by purchasing the real estate asset and subsequently leasing it back to the operator. Or if the cannabis company is looking to expand to a new regional or state market and needs real estate, Scythian is able to use its vast resources and connections in the cannabis industry to assist with cannabis real estate acquisition, development, and management.
Scythian utilizes highly skilled local property managers to ensure that all properties in the privately held real estate fund are well maintained and that they meet the terms of the lease. Since Scythian owns and manages real estate used by cannabis operators, the real estate fund does not have an ownership stake in any cannabis operator. This allows Scythian to serve as a trusted third-party landlord and real estate partner to the cannabis businesses and to assist those businesses as they look to expand nationally into new and exciting cannabis markets.
The Scythian Cannabis Real Estate Portfolio
Through our long-standing relationships with respected cannabis operators, we have built a stable real estate portfolio that spreads throughout Colorado, North Dakota, and Pennsylvania delivering above-market returns and providing capital security.
Scythian Real Estate is a privately held real estate fund with a portfolio that currently includes 23 cannabis properties with a total value in excess of $42M. The Scythian cannabis real estate portfolio consists entirely of real estate acquisitions in states where cannabis is medically or recreationally legal, such as Colorado, Pennsylvania, and North Dakota. Scythian also has an existing acquisition pipeline that is valued at more than $25M and that includes more than a dozen cannabis real estate properties in five (5) states with favorable regulatory environments, including Michigan, Missouri, and New York.
Since Scythian typically works with state-licensed cannabis operators that have a heavy retail presence in legal cannabis markets, the Scythian Real Estate Fund consists primarily of cannabis retail assets: dispensaries that sell adult-use marijuana or medical-use marijuana directly to consumers. Thanks to Scythian’s long-standing relationships with respected cannabis operators and brands, we have built a stable real estate portfolio that spreads throughout the United States.
Scythian’s Advantage in the Cannabis Real Estate Market
The Scythian team has been providing the cannabis industry with real estate solutions since 2014 and is one of the largest privately held partnerships in the sector. As a result, Scythian is a trusted third-party landlord and real estate partner to some of the most esteemed cannabis operators in the United States. These partnerships mean that Scythian’s cannabis real estate portfolio is second to none when it comes to quality, property location, and potential.
Here are some of the key factors that make the Scythian cannabis real estate fund stand out:
Experienced Owner of Cannabis Real Estate
The Scythian cannabis real estate portfolio currently includes 23 properties across 3 states. Scythian has proven experience acquiring and managing cannabis real estate assets and is building a diversified real estate portfolio.
Comprehensive Due Diligence Process
Scythian’s team of experts has extensive experience in commercial real estate and has developed a rigorous due diligence process for identifying properties that are well-located, priced above market value with limited cannabis premium, and located in thriving cannabis markets.
Scythian has access to a pipeline that includes several of the nation’s premier cannabis companies, such as The Green Solution (acquired by Columbia Care) and Grassroots Cannabis (acquired by Curaleaf). Scythian’s strong relationships with nationally recognized operators in the cannabis industry means that the Scythian Real Estate Fund often receives above-market cap rates on properties that are leased back to the cannabis operators.
in Top Markets
All of Scythian’s cannabis real estate assets are located in well-tested markets with huge potential for future growth. This includes Colorado, which is the nation’s most developed and mature legal cannabis market, as well as other limited license states where recreational and medical cannabis sales remain strong.
Avoidance of High-Cost Locations
Scythian is able to acquire cannabis properties at the lowest possible cost, which allows for flexibility if the need ever arises to re-let a property to a non-cannabis tenant. Additionally, the high number of real estate assets in the Scythian cannabis real estate fund reduces the fund’s asset concentration risk.
The Scythian Real Estate Fund’s partnership structure provides tax advantages for cannabis real estate investment, such as pass-through depreciation.
Market Is Booming
The legal cannabis market in the United States is booming, with more and more states offering adult-use cannabis or medical-use cannabis products. According to cannabis industry experts, the total economic impact of legal cannabis sales in the U.S. will be more than $130 billion annually by 2025
State legalization efforts have been incredibly successful in recent years: 36 states currently allow legalized cannabis for either recreational or medical use, and cannabidiol (CBD) is legal in most other states. This means that 99% of Americans already have access to some form of legal cannabis. Moreover, these numbers figure to go even higher as the U.S. cannabis landscape changes and adult-use cannabis legalization continues to generate momentum.
With the regulated cannabis industry gaining legitimacy and becoming more accepted as a mainstream business, the opportunities for individuals interested in the cannabis real estate market and cannabis real estate investment have increased considerably. Since marijuana is still classified at the federal level as a Schedule I drug, cannabis operators and landlords are blocked from accessing most normal financing options through traditional lending institutions. This presents a window for Scythian Real Estate Fund, which leverages strong operator relationships to acquire and then lease cannabis real estate.
Scythian Generates Strong Financial Results in Cannabis Real Estate
Scythian’s rigorous due diligence process includes identifying and evaluating real estate assets that are likely to generate strong revenues. All properties acquired by Scythian are priced based on fair market value when accounting for a limited “cannabis premium” on the property sale price. Scythian specifically targets completed and stabilized real estate assets that can generate cash-flow through use as retail dispensaries immediately upon acquisition.
In addition to generating revenue through monthly rent paid by the cannabis operator tenants, the high-quality cannabis real estate assets acquired by Scythian stand on their own merit. The properties must be available at a reasonable price that offers significant potential while still accounting for the cannabis premium that often inflates cannabis property sale prices. Additionally, the properties acquired by Scythian must be located in a state where cannabis is legal for either recreational or medical use and in a market where the real estate is likely to appreciate in value in the future.
All of the cannabis real estate properties acquired by Scythian are triple net leased (NNN). This means that each property has a lease agreement in which the tenant agrees to pay all property expenses, such as rent, utilities, real estate taxes, necessary maintenance and repairs, and insurance costs. Since the bulk of monthly expenses are paid by the tenant, NNN-leased properties are a low-risk opportunity for long-term and steady income.
Contact Scythian Today for More Information About Cannabis Real EstateContact Scythian now to learn more about cannabis real estate. You can send an email or use the form below to request information about the Scythian Real Estate Fund.
DISCLAIMER: PLEASE NOTE THAT THIS PAGE IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.