WelCan Capital has announced the launch of WelCan Capital Fund I, the first impact investment fund focused on the cannabis space and the “injustices stemming from cannabis prohibition”.
The newly launched venture capital firm with offices in New York and New Jersey, will manage the fund under its “people + purpose + profits” investment philosophy, focusing on four core verticals: PlantTtouching and Ancillary Cannabis Businesses; Business Services; Emerging Technology; and Software and Licensed Operations.
Fund I plans to invest in businesses that are ethically aligned with the firm, which envisions an ethical and sustainable cannabis industry on a solid footing toward long-term success. The fund also will give a percentage of its annual profits to select organizations and foundations that are working to help strengthen and foster a responsible cannabis industry.
“The lack of institutional capital in the space creates a compelling opportunity for investors,” said Vikas Desai, partner at WelCan Capital. “Our focus is to drive performance, while also playing a vital role in shaping the future of key issues today: sustainability, medicinal research, criminal justice reform and our nation’s opioids crisis. We know creating lasting, responsible change and maximizing opportunities for investors are not mutually exclusive. We look forward to driving financial and social returns for our investors, the industry and communities at large.”
Taking a forward-thinking stance, WelCan has an eye toward technologies and services that will be key to the industry within the coming decade.
“Our forward-thinking vision helps us handpick strategic early-stage and growth opportunities that will drive lasting change. We particularly believe that partnering with experienced management teams, who possess a clear purpose and track record of success, make the smartest investments.”
The Fund I portfolio already consists of two investments: Sanctuary Medicinals, a Massachusetts-based vertically integrated license holder dedicated to efficiency in production and excellence in patient care, and Treez, a leading SaaS platform for dispensaries geared toward optimizing operations and the customer experience.
The firm also has multiple potential West Coast investments in its pipeline – something it sees as advantageous when combined with their East Coast location, reports Crain’s New York.
At the end of the day, California, Colorado and Washington are big markets, but they’re all mature markets at this point,” said John Twomey, partner at WelCan. “What’s really strategic about being on the East Coast is that most of these West Coast companies have ambitions to expand out east, and by being out here we have an ear to the ground.”
Marijuana Maturation
The legal marijuana industry is still dealing with inter-state regulatory issues, and the lack of legalization on a federal level has left those operating legally within the sector with a lack of commercial credit, however, state-level legalization of recreational and/or medical marijuana continues to spread. Together with advancements in cultivation systems, the development of new strains, and the strengthening of supply chains, the market has been quick to gain a level of credibility.
As of March 30 of this year, eight states have legalized marijuana for recreational use, while another 20 states have laws in place that broadly legalize medical marijuana, according to Governing.com.
One of the first and largest investors in the sector is Privateer Holdings. Since the firm was founded in Seattle in 2010, it has raised $200 million in private capital to invest in the legal cannabis industry globally. As of March of this year the firm had three companies in its portfolio including Leafly, a cannabis technology, review, news, and entertainment platform; Tilray, a global medical cannabis producer with patients in eight countries; Marley Natural, the official Bob Marley cannabis brand; and The Goodship, all-natural gourmet edibles.
Today, Privateer is the first such company to hold federal production licenses from two countries, and is positioned at the leading edge of a burgeoning investment class.
“As the pace of regulatory change continues to increase, the investment community is getting wise to the massive, global, and inevitable opportunity that is legalized and regulated cannabis. Like alcohol, cannabis is counter-cyclical and immune to macroeconomic trends,” Privateer CEO Brendan Kennedy told GAI News.
The paradigm shift in the industry is taking on a global scale. Kennedy states that Canada is now the first G-7 country to establish a federal medical cannabis program, and half a dozen governments across the EU have legalized medical marijuana use, while half a dozen more are currently debating legalization in their national parliaments.
“The global cannabis market – both for medical purposes and responsible consumption – presents numerous opportunities,” said Kennedy. “The end of prohibition is inevitable, and I look forward to witnessing market growth, new products being developed, and the social and economic harms of the war on drugs being remedied in due time.”
-Lynda Kiernan
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