SCARCITY OF CANNABIS DEBT CAPITAL
Cannabis companies are significant consumers of capital, however, available credit for US and Canadian cannabis companies is exceptionally scarce due to continued illegality under federal law, headline risk, and a lack of understanding regarding collateral.
Cannabis companies are experiencing accelerated growth and in need of capital, but without access to the debt markets, they have to use expensive equity to finance their expansion. The scarcity of available capital has created an opportunity for credit providers to achieve favorable, near-equity returns with debt structures and terms.
Presently, the most active investors in the debt space are family offices and limited participation from non US private credit investors with industry knowledge.
Zero Availability of Traditional Credit
The current legal status of cannabis in the US prevents FDIC insured banks and conventional lenders from making loans to cannabis companies. Specialty lenders and certain private finance companies as well as family offices have been successful in filling the credit vacuum to provide growth capital for capital expenditures and acquisitions.
The Need for an Advisor: The Role of Kligier Capital
As transaction layers increase and new lenders and equity providers enter the cannabis market there is a need for experienced intermediaries to arrange the transactions, negotiate and advise borrowers and create cost efficient and workable capital structures.
Laurie Feldman| Managing Principal & Partner
firstname.lastname@example.org | (845) 399-7137
Avi Zukerman| Principal & Founder
email@example.com | (646) 552-7701