In an interview, Pelorus Equity Group co-founder and president Rob Sechrist said he and the company believes they are the first to secure such a large credit line at such a low rate with a federally insured bank. He declined to name the bank, citing a confidentiality agreement as the reason.
“Most people are confused. They think that there is no banking,” Sechrist said, referring to the restrictive banking climate cannabis companies must operate in due to cannabis’ federal illegality.
“There’s actually an enormous amount [of formal banking activity in the cannabis industry]. We’ve never seen a borrower or a tenant that we’ve ever written, out of a few thousand transactions we’ve seen, not have banking in place. Currently, there are 694 banks that have a depository relationship for cannabis related businesses,” Sechrist said. He added that the main reasons some banks may not engage in business with cannabis businesses are because of reputational risk, as well as compliance risk.
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About Pelorus Equity Group
Pelorus Equity Group (“Pelorus”), the leading provider of value-add bridge commercial real estate loans to cannabis businesses and owners with cannabis-related real estate, and its Pelorus Fund, a private mortgage real estate investment trust (“mREIT”), are changing the commercial real estate lending landscape in the cannabis sector. Pelorus Fund offers a range of innovative transactional solutions to address the diverse needs of real estate investors and portfolio managers, and its flexible acquisition and bridge lending programs are the direct result of the firm’s involvement in more than 5,000 transactions of varying size and complexity. Since 1991, Pelorus’ principals quickly understand an opportunity, structure a logical solution and execute a timely close and have participated in more than $5B of real estate investment transactions using both debt and equity solutions. To date, Pelorus has completed 63 commercial real-estate loan transactions and deployed more than $350 million to cannabis businesses and real estate owners, comprising of more than 3,200,000 sq. ft. in eight states across the U.S. With the ability to fund approved construction draws for reimbursement in an average of one to three days and a single agreement covering the financing of the entire project, the Pelorus Fund helps to stabilize cash flow for its clients, so they are able to remain focused on their core business goals and objectives.
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