Weed is going mainstream. Several executives from High Times Magazine are in the final stages of launching a private equity fund for Marijuana-related businesses, according to an article in the Denver Post today. The new “HT Growth Fund” is planning to raise around $100 million over the next two years.
Further details from High Times
HT’s Growth Fund will be managed by Michael Kennedy, general counsel and director for High Times, and Michael Safir, the magazine’s business manager. The fund will generally be looking at investments from companies in the $2 million to $5 million range.
Tiger Legatus Master Fund was up 0.1% net for the second quarter, compared to the MSCI World Index's 7.9% return and the S&P 500's 8.5% gain. For the first half of the year, Tiger Legatus is up 9%, while the MSCI World Index has gained 13.3%, and the S&P has returned 15.3%. Q2 2021 hedge Read More
“We have a deep and detailed knowledge of the needs and wants of the cannabis industry,” reads a statement on HT’s website. “The team at the HTG Fund have a combined 70 years of experience related to all things cannabis, which allows us to use our historical knowledge to foresee the future.”
Safir elaborated further on the purpose of the fund in his interview with the Denver Post. “What we are looking to do is provide capital and credit to companies that are established and have grown and reached their potential as much as they can without access to traditional capital markets.”
Good news for marijuana-related businesses
The launching of a private equity fund to support marijuana-related businesses is great news for many small marijuana growing, processing and retail businesses as access to capital has been a major stumbling block for the fledgling industry to date.
Most traditional business fundraising mechanisms are closed to marijuana-related businesses as banks and other financial institutions are generally not willing to make loans given the conflicting federal and state legal status of marijuana. To date, most marijuana entrepreneurs have had to fund their own operations out of pocket or find an angel investor, so the availability of one or more private equity funds is a huge boon to an industry looking to enter the rapid growth stage.