Rising in a crescendo of new pot laws, funding for cannabis companies has exploded.
Today, Smoking Buddies founder Jordan Weisman is announcing a new subsidiary of Bespoke Financial, a West Coast lender that will finance cannabis companies as they launch their own retail operations.
Over the last 10 years, Weisman and his cousin Ben Breslow have built a reputation in financial services as being among the few people willing to go through the long and arduous vetting process required to lend money to entrepreneurs in the nascent cannabis industry.
“We aren’t new here, we’ve been working in banking in California for the last 16 years,” Weisman says, citing Weisman’s charter bank predecessor and what were then the only other lenders with non-profit and non-dispensary state charters.
Like it or not, Bespoke Financial plans to make those loans to cannabis companies.
While Weisman and Breslow are taking on their first payday lending opportunity, they’ve been setting out to build a sizeable and potentially powerful financial platform. For Weisman, that means taking advantage of a burgeoning market, if not for cannabis businesses than for any other entrepreneurs with ambitions to build their own cannabis supply chains or retail chains in Colorado, Washington, California, and other states now poised to begin regulating the industry.
Through the rest of the fall, Bespoke will be working with the east coast bankers to ensure that we’ll be able to offer financing in states that permit it. While many of the new businesses plan to grow operations nationwide, Weisman notes that there’s plenty of business opportunity to be had in individual states, even if less attractive legal jurisdictions lurk on the horizon.
Bespoke Financial’s investors include Breslow, LeBron James’ business partner Maverick Carter, Meghan Markle’s husband and her business partner, Trevor Engelson, rapper Snoop Dogg and Casa Verde Capital, the third and largest LP in the cannabis-focused investment fund Ubuave Capital Partners.
The company’s plan is to take the longer-term view: not just lend money, but bank on an emerging industry.
“There’s a whole bunch of opportunities to consolidate, and bring people together to grow,” says Weisman, noting that as a cannabis grower, a dispensary owner, an organizer of flower shows, a distributor, and an importer, he’s never quite sat down with a lender that would keep its distance.
As the federal government keeps contemplating tightening its prohibition on the drug, the race among states to regulate and tax the industry has been heating up. Cannadore, the nation’s largest cannabis company, is preparing to run for and win a position on the Colorado state government ballot, even as it eyes the possibility of its $1 billion market value more than doubling through a public stock offering.
The federal government hasn’t gotten the memo either. Last week the DEA announced it would allow marijuana rescheduling as a Schedule I substance, with reservations. One particular contradiction in the new labeling has a lot of people wondering how long until states struggle to get large parts of the federal government’s stamp of approval.
Weisman sees the company as a natural partner to players like Setara Holdings, which is planning to open stores in the Washington, D.C. area in the coming months, and Denver-based Titan Wine. The wineries, it turns out, would have a license to sell directly to the shops, and the DEA had not suggested changing the licencing.
“We’re in a unique position,” says Weisman, who first met Bo Layden, Titan’s CEO, during an investment pitch session held by cannabis-focused funding company Green Block Investment. “There are very few entities out there that have the expertise.”