BMD Attorneys Stephen Lenn and Brandon Pauley are pleased to provide the following report on the organizational meeting of the Institutional Cannabis Lenders Community (ICLC) that we initiated and formed.
As indicated in prior blogs, for purposes of this Community, institutional lenders include banks, credit unions, dedicated cannabis loan funds and family office/ultra-high net worth investors.1
The ICLC now has 21 participants including banks and credit unions (ranging in size from single-state community institutions to 2 of the 50 largest US banks), a credit union service corporation that syndicates cannabis loans to credit unions, dedicated cannabis funds (including Altmore Capital, Chicago Atlantic Silver Spike and Rainbow Realty), several specialty lenders, investment banks and family office advisers.
The organizational meeting of the ICLC was held on March 31st in Scottsdale, AZ. Perhaps most importantly, from our perspective, is that the consensus, summarized below, reflects the view of those who attended that both the ICLC itself and the in-person meeting were worthwhile.
- Attendees included both critical mass and a geographically dispersed representative cross-section of our participants—large funds, banks and credit unions, and investment bankers from California, Texas, Illinois, New York, Ohio and Arizona.
- We had both general engagement and participation, with discussions covering a variety of topics ranging from the diverse perspectives of the attendees on the current status and future direction of the cannabis industry in general and lending, in particular. Additionally, there was robust discussion of topics of interest, including the challenges posed by the illegal markets, the current scarcity of equity and the potential impact of the current banking disruptions.
- Consensus:
- The ICLC should be formally organized;
- We should target at least 4 sessions, 2 in person (piggybacked on the major cannabis events that many of the participants might be attending anyway—perhaps coming in for an ICLC meeting the day before MJBiz or Benzinga) and 2 virtual meetings—1 or both of which could be for a forum on evolving best practices.
- Participation should be selective, limited to organizations and individuals engaged in some facet of the cannabis debt markets, and that participants should be proactive in identifying and recruiting additional members.
Footnote
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