The AP Investment Fund, focused on real estate investments and lending into the cannabis market, has announced its $12.6 million final close.
The new fund will make strategic real estate investments and loans to marijuana dispensary businesses in California serving recreational consumers.
“We have attracted investors who see the value in building a highly professional, well-valued real estate portfolio,” said Kyle Kazan, one of the fund’s managing members, in a statement.
The fund has made its first real estate acquisitions in Santa Ana and Santa Barbara County, which includes a grow facility supporting one of the fund’s dispensary borrowers in nearby Santa Barbara.
“Participants in the cannabis industry have struggled to acquire the necessary capital to purchase real estate and facilitate ongoing operations,” Kazan said. “This is precisely the void our fund addresses.”
The closing comes after several new US states, including California, Massachusetts and Nevada voted to legalise the recreational use of marijuana earlier this month (a recount is underway in Maine after a narrow approval), adding to a list that already included Alaska, Colorado, Oregon and Washington, along with Washington, DC.
As outlined in Agri Investor’s commentary this week, the legalisation comes as more US citizens and corporations embrace marijuana, and many anticipate significant industry growth which will increase private investment into the sector.
Many of AP’s investors are investment managers and none were invested in cannabis before the fund’s existence, according to the statement from the fund.
“Only those who move quickly will have the opportunity to reap the benefits,” Kazan said. He was unavailable for additional comment in time for publication.
Kazan, a former police officer and co-Founder of real estate investment firm Beach Front Properties, is also a member of Law Enforcement Against Prohibition, made up of current and former law enforcement members who support drug regulation rather than prohibition. The AP fund name stands for “anti-prohibition”.