Cannabis REIT AFC Gamma Files NASDAQ IPO

Commercial real estate finance company AFC Gamma, founded in July, has filed an S-11 to go public on the NASDAQ as a REIT. The company, which expects to trade under the symbol “AFCG”, has named JMP Securities, Ladenburg Thalmann and Seaport Global Securities as its underwriters. AFC Gamma raised $80 Million this past summer from more than 20 family offices, and the preliminary prospectus disclosed the recent sales of $12.3 million in equity and $125K in Series A Cumulative Non-Voting Preferred Stock. The company also has a $40 million line of credit.

New Cannabis Ventures recently interviewed founder Leonard Tannenbaum, who discussed the company’s investment approach. Tannenbaum ran Fifth Street Management previously. The prospectus didn’t detail the expected size or the potential pricing, but the company is expecting to raise up to $115 million.

If successful listing, AFC Gamma will become only the second pure-play cannabis REIT to go public on a major exchange, following Innovative Industrial Properties (NYSE: IIPR), which debuted at the end of 2016. More recently, Power REIT (NYSE: REIT) has begun to fund cannabis operators with sale-leaseback transactions.

According to the IPO preliminary prospectus, AFC Gamma has funded $92.5 million in loans and have commitments for an additional $19.8 million. The company has disclosed transactions with privately held Nature’s Medicines and publicly traded Curaleaf (CSE: CURA) (OTC: CURLF) and Bluma Wellness (CSE: BWEL) (OTC: BMWLF). No borrowers were named in the prospectus, but the company did describe loans and pending loans to 4 private and 3 public companies.

Exclusive article by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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