Investment strategy

We are experts in cannabis lending, a market that is booming and here to stay. The Pelorus Fund offers investors exposure to this unique sector and the opportunity to receive monthly high yield income.

With years of experience in financing non-standard real estate, our offering is tailored to the unique requirements of the cannabis sector.

We finance the construction / conversion of properties for cannabis industry usage:

  • Rapid growth of the US cannabis sector means high demand for cannabis-ready real estate
  • Build outs for cannabis assets are highly specialized and costly as with other specialty use real estate assets, e.g. data centers, cold storage and lab space
  • Financing for these improvements is difficult to obtain and delays can cost owners millions, so they are willing to pay a premium for our reliable, turnkey service

  • The ability to reduce the note rate once the project has been completed and fully stabilized

You can share in these revenues by investing in the Pelorus Fund:

  • Private Mortgage REIT
  • 12% IRR Target yield
  • Monthly distributions

The cannabis market is booming and here to stay.

The US cannabis market has experienced rapid growth in the last ten years and is showing no signs of slowing.

Already, 78% of states have approved cannabis for medicinal use, with 42% legalizing it altogether.

 

With further easing of legislation expected, the total legal cannabis market is estimated to grow by 14% CAGR through 2025.

Ultimately, this is what the public wants, with two-thirds of the US population being in favor of cannabis legalization both for medical and recreational use; a considerable improvement from 2010 when the number stood at 52%.

In accordance with The Rohrabacher-Farr Amendment, which was passed in 2014 to prevent the Justice Department from preventing states from authorizing medical cannabis programs, consumer enthusiasm for the full legalization of cannabis is increasingly being supported at the federal level. With several pieces of legislation pending to support the growth of the cannabis sector, the full legalization of cannabis is considered a question of when, rather than if.

Pelorus is in a position to charge a premium to traditional financing providers due to our specialized offering, tailored entirely to the cannabis industry.

We are able to do this because we offer cannabis real estate owners and owner/operators 3 significant advantages over other lenders:

  • We typically process construction draw requests in just 1-3 days
  • Because we understand the long-term value of the specialized improvements required by the cannabis industry we can typically lend the full amount of financing required
  • One agreement can cover the financing of the entire project

Even though our lending rates are higher, our total cost of lending is typically lower, and our speed of service means both owners and operators can start earning sooner.

Our proprietary cannabis industry data platform gives us a competitive advantage over other lenders.

The cannabis real estate sector offers the potential for substantial risk adjusted returns, but adds several layers of complexity to any transaction. Commonly used, industry standard real estate databases do not collect important cannabis-specific information. As a result, we have invested significant time, effort and capital into building the cannabis sector’s leading data and analytics platform.

“

Our proprietary data tools enable us to understand the supply dynamics of cannabis related property across the US; we know the location, the property type and the size – details that are essential to accurately assess risk and value Travis Goad, Managing Director

Travis Goad, Managing Director

By being able to understand the supply dynamics of the sector better than anyone else, we can make smarter decisions, faster.

Why invest in the Pelorus Fund?

Our investors benefit from multiple revenue sources and a taxed advantaged mortgage REIT structure.

Mortgage REIT benefits

  • Qualifies for a 20% Federal tax savings on income distributed to the Fund Members
  • Investors only pay state taxes in their domiciled State, and not in California, where Pelorus originates, or States where our loans generate income
  • Cleanses UBTI for Self-directed IRA investors
  • The Pelorus Fund has the first right to fund any cannabis-use commercial property transactions before the transaction would be syndicated to outside investors

Members receive

Our investors benefit from multiple revenue sources as well as the mortgage REIT structure.

  • Interest income
  • Pro-rata share of interest collected on loans
  • Origination fees
  • Pro-rata share of origination fees received for closing loan transactions
  • Extension or exit fees
  • Pro-Rata share of fees received for any loan extensions or early exits.
  • 50% of Equity Participations
  • Pro-rata share of any equity or equity linked compensation received by Pelorus in any loan transaction.