MedMen joins at least four other cannabis funds
MedMen seeks $100 million for marijuana investments
MedMen is trying to raise $100 million for MedMen Opportunity Fund, according to firm founder and Chief Executive Adam Bierman.
By Ainslie Chandler, Bloomberg Brief
MedMen, founded in 2009, previously acted as a management company for businesses with medical marijuana licenses. It also invested money from family offices and venture funds in special purpose vehicles where the investors held the cannabis licenses, Bierman said in a May 26 interview.
Existing investors pushed the firm to raise a fund to allow for greater diversification in their portfolios, he said.
“If you are a multi-billion dollar family office or an institutional quality investor, you are not making one-off investments in the $3 million to $5 million range with single-asset exposure in a market that is complicated from a regulatory environment,” Bierman said.
The Los Angeles-based firm held a first close on the fund in May and hopes to have a final close within six months, Bierman said.
The fund will invest in cannabis-related projects, he said.
“Every project we invest in will have a management contract with a captive operating partner, MedMen,” Bierman said. “It’s a combination of dirt, real estate on top of dirt, fit-out and equipment, and everything that goes along with that.”
The fund will invest in markets with limited numbers of licenses, Bierman said, noting that the firm is currently investing in projects in Nevada, California and Illinois.
Venture capital firms invested a record $215.2 million in private cannabis companies in 2015, more than double the $97.1 million invested in 2014, according to data from venture capital research firm CB Insights. Investments went to companies ranging from a maker of LED lights for greenhouses to a mobile payments app maker and a service that links customers to doctors who can write cannibis prescriptions.
Federally, cannabis remains illegal but states are able to make their own rules about the substance. Voters in Oregon, Alaska, the District of Columbia, Washington and Colorado have approved marijuana for recreational use for adults and at least a dozen states are considering measures regarding medical or recreational marijuana use this fall.
A handful of venture capital and private equity fund managers have raised smaller sums for the strategy. Newport Beach, Calif.-based marijuana-focused venture capital firm Ghost Group raised $5 million for its 2013 venture capital fund Emerald Ocean Capital LP, to invest in companies and technology in the legal cannabis and medical marijuana industries, according to press reports at the time.
New York-based Tuatara Capital LP in June 2015 closed on $26 million for its cannabis-focused growth fund Tuatara Capital Fund I LP, according to a regulatory filing, and Boca Raton, Florida-based Phyto Partners Ltd. raised $2.2 million for Phyto Partners I LP at June 2015, according to another regulatory filing.
Chicago-based venture capital firm Salveo Capital, which focuses on medical marijuana, is trying to gather $25 million for Salveo I LP, according to press reports from 2015.
Source: Bloomberg Briefs