New York City Private Equity Firm Brings Cannabis Investing to Institutional Investors

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.

 

Published by Alan Brochstein, CFA

Alan Brochstein, CFABased in Houston, Alan leverages his experience as founder of online communities 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.


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