REIT out of Florida raises $80 million for cannabis lending programs

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AFC Gamma continues to raise funds to help the cannabis sector grow

As the cannabis industry continues its normal course towards maturity, it continues to face situations along the way that can end up slowing down its progress, such as the fight for accessing financial services. In the meantime, a new company has emerged to service cannabis businesses with lending programs, a real estate investment trust (REIT) called AFC Gamma. Recently, West Palm Beach, FL-based AFC Gamma raised $80 million that, placed with the $40 million coming from a credit line, brings nearly $120 million in financial support for cannabis businesses through a lending program.

To raise the funds, more than 20 large family offices participated, according to a news release. The goal is to raise a total of $200 million, and this first portion of $80 million constitutes the first close of this investment vehicle. This is not the first time that AFC Gamma services the cannabis industry; it has already provided debt financing for five cannabis companies, such as retailers, cultivators and processors. So far, AFC Gamma claims to have funded around $50 million in a total of six transactions that involve five marijuana borrowers. Another $30 million will be saved for existing borrowers to use, as will two new loans that are in the plans.

The rise of REIT companies is becoming a trend in the cannabis industry, with a few others picking up successes already. For example, California-based Innovative Industrial Properties has spent $100 million since April to buy cultivation and distribution facilities across the country and bring cash injection to an industry that cannot access regular credits.