In episode 60 of Investing in Cannabis, Brandon David interviewed Asher Troppe, CEO of Tress Capital, a private equity firm based in New York City. Troppe brings a finance background, while partner David Hess brings cannabis expertise. The company is building an institutional quality platform for other investors to capitalize on the industry. Tress Capital set up its fund with administrator SS&C Technologies Holdings, which has over $1 trillion in its custody, a relationship that helps establish credibility with potential institutional investors.
Troppe discussed several of the investments that they have made, including Baker Technologies, Headset and SC Labs. His firm’s focus areas include lab testing and real estate. While the firm has made investments into direct cannabis companies, its focus is mainly on ancillary companies that support the industry’s infrastructure. Tress Capital’s investments range from up to $500K for seed rounds and $500K to $10mm for companies further along. It typically originates its own deals. The company seeks defensible businesses with a strong management team and a demonstrated record of execution.
In addition to its own funds, Tress Capital is working with private clients on a consulting basis to structure their own investments. Troppe explained how the company is bringing the cannabis industry to the institutional investor crowd, offering as an example a recent conference it hosted with Bloomberg in New York City. He has observed the landscape changing significantly in the recent months, suggesting that large institutions are quietly participating in the market now.