Cannabis Funds of $2 Billion Sought by Ex-Investment Bankers of Chase and Deutsche

According to a recent article by Bloomberg, a new cannabis asset manager is being launched by former investment bankers from Deutsche Bank AG and JP Morgan Chase & Co. The cannabis manager, called Silver Spike Capital, is looking to raise up to $1 billion in the fourth quarter. However as a news report by Hobbit Financial Times explains, “Cannabis is federally illegal in the US so most big Wall Street investors shy away from the nascent industry.”

Scott Gordon, the founder and chief executive officer, shared his position about setting up the money manager in light of the challenging market. He stated,

“We love messy, choppy markets.” He continued, “I think the current duress in the public markets will be good for us, not only because it will give us better entry points to go long public company stock, but I think it’s also resetting valuations in the private market as well.”

The fund will be in addition to Silver Spike Acquisition Corp., which is a special purpose investment vehicle on the Nasdaq. The fund aims to acquire pot-related businesses within the next 18 months. Gordon added in the article,

“The whole idea behind having these different strategies that span the various components of the cap structure is so that you have flexible capital that can best suit the needs of the company that’s seeking financing.”

Gordon also shared his background in emerging markets and that he worked at JPMorgan, Bank of America Corp., and is the current chairman of Papa & Barkley, a marijuana company.

All information is for general informational and educational purposes only. Nothing should be interpreted as legal or wellness advice.