Institutional Provider of Capital to the Cannabis Industry
Advanced Flower Capital Gamma (AFC Gamma, NASDAQ AFCG) is a leading provider of institutional loans to high-quality cannabis companies nationwide in all aspects of production: cultivation, processing, and distribution. We offer loans and related facilities, generally secured by substantial assets which rely on a repeatable process that screens for creditworthy, high-profile borrowers. With years of combined lending expertise and real-estate experience, AFC Gamma’s principles are now focused on the exponential growth of the cannabis industry.
AFC Gamma. Advanced Flower Capital’s commercial finance REIT blends cash flow and real-estate underwriting.
The Advantages of a REIT*
AFC Gamma is a real-estate investment trust which gives investors access to income generating commercial real estate investments. Not only is a real-estate vehicle appropriate for a real-estate lender, but a REIT offers investors several benefits. It’s income-oriented, with REIT participants eligible for a steady stream of distributions. And since REITs earn their tax exemption by distributing at least 90% of their income to unit holders annually and a 20% Qualified Business Income Deduction, REITs can typically generate more and higher-yielding (taxable) cash flow to their investors.
Why AFC Gamma
The interest in the development of cannabis-based therapies and consumer products cannot be denied. However, while cannabis can be an appealing investment, the federal landscape is uncertain from a regulatory standpoint. Policies governing cannabis vary across the country and every state is different with regard to regulation, license requirement, and supply / demand dynamic. As a result of our rigorous diligence, not all operators qualify for financing. Potential investors as well as companies in the cannabis space deserve the highest quality when selecting an institutional lender. We believe that AFC Gamma stands out.
Our multi-step underwriting process is highly selective and attuned to investing in opportunities with attractive risk-adjusted returns while securing collateral to manage downside risk. As of September 30, 2021 of 409 potential deals, only 18 made it to funding or commitment, with 75 under further review.
We aim to develop long-lasting relationships with our borrowers and investors. We believe that AFC Gamma’s institutional approach to structuring deals and reputation for building relationships fills the void left by a lack of financing in the cannabis space making it more likely for our partnerships.
We structure loans to meet our borrower’s needs. This customized approach means that AFC Gamma can grow and expand our partnerships, which benefits our borrowers as well as our investors. A well-tailored deal is more apt to deliver strong returns.
Bn of transactions
From January 1, 2020 through December 24, 2021
The United States retail cannabis market is expected to generate between $22.0 and $26.4 billion in total sales for 2021. The annual U.S. retail cannabis sales were also projected to rise to between approximately $38.4 billion and $45.9 billion by 2025 (1).
Key Market Drivers
- Rising demand from consumers for therapies and products derived from cannabis
- Increasing positive legislation in support of cannabis
- Wide range of benefits for both medical and recreational use
- Growing medical use
- U.S. cannabis industry is estimated to have a total annual economic impact of greater than $90 billion by 2023 (1)
- Interest-bearing loans as a type of investment in the cannabis industry increased to 37% in 2019 from 22% in 2017 (2)
(1) Source: 2021 Marijuana Business Daily.
(2) Source: 2019 Marijuana Business Factbook
AFC Gamma is proud of the leading industry experts and management team we’ve assembled whose backgrounds are directly related to generating cash flow and real-estate lending. Meet our senior-level executives; see full team here.
* Investment instruments represent a variety of benefits and risks. A well-diversified investment portfolio generally allows for a more balanced risk/reward profile than one that is heavily concentrated in one or a limited number of investment instruments. Similar to many investment options, REITs can offer a number of benefits but they also carry a variety of risks. When considering participation in a REIT in comparison to participating in other investment products, an investor should evaluate any similarities and differences among the various investment options being considered so that a thoughtful decision can be made as to which investments may be appropriate for that investor..
Please contact us for additional information about AFC Gamma and the solutions we can deliver for you.
Leonard M. Tannenbaum, CFA
Chief Executive Officer of the Manager, Chief Executive Officer of AFC and Class I Director of AFC.
He is responsible for the overall management of AFC and leads the firm’s Investment Committee, which is responsible for overseeing investment processes including origination, credit underwriting, risk analysis and investment approvals. Mr. Tannenbaum and his management team members have been involved in approximately $10 billion of successful loan transactions. Mr. Tannenbaum is of Cuban heritage with extensive leadership experience. He was formerly the founder and CEO of Fifth Street Asset Management (Fifth Street), a credit asset manager with a nationwide platform, which was sold to Oaktree Capital Management in 2017. Prior to its sale to Oaktree, Fifth Street had a core focus on disciplined credit investing across multiple economic cycles, and issued billions of dollars in public equity, private capital and public debt securities. Fifth Street made flexible investments across capital structures to growing middle market companies, primarily in conjunction with private equity sponsors. It managed $5 billion of assets across multiple private investment vehicles and two publicly-traded business development companies. Subsequent to the sale to Oaktree in 2017, Mr. Tannenbaum founded LMT Investments, a singly family office that is focused on allocating capital across various strategies including credit via Tannenbaum Strategic Credit Fund, a $100MM+ fund, equities and real estate. Mr. Tannenbaum graduated from The Wharton School of the University of Pennsylvania, where he received a B.S. in economics. Subsequent to his undergraduate degree from the University of Pennsylvania, he received an MBA in Finance from The Wharton School as part of the submatriculation program. He is also a holder of the Chartered Financial Analyst designation and is a member of The Wharton Graduate Executive Board.
Partner, Head of Origination and Investor Relations.
Mrs. Tannenbaum has over 8 years’ experience focusing on mergers and acquisitions and leveraged loans to healthcare companies. Additionally, she has 5 years of experience as an investor relations professional within the finance industry. Mrs. Tannenbaum formerly served as Head of Investor Relations at Fifth Street Asset Management and as a Vice President in Healthcare mergers and acquisitions at CIT Group Inc. She graduated summa cum laude with a B.S. in Finance, with a concentration in Marketing and a Public Relations minor from Lehigh University.
Principal of Manager, Head of Real Estate and Class II Director of AFC. Mr. Kalikow is AFC’s Head of Real Estate as well as a member of the AFC Board.
He is president and founder of Gamma Real Estate, a boutique commercial real estate firm based in New York City. The firm lends on real estate nationwide, owns a portfolio of approximately 5,000 apartments and several office properties in the Southeastern US, and developments real estate, including an 850 unit residential building on Sutton Place in Manhattan. Prior to co-founding Gamma Real Estate, Jonathan Kalikow spent 18 years on Wall Street investing across industries and asset classes as a proprietary trader at Morgan Stanley and then as a hedge fund trader and portfolio manager. Mr. Kalikow is a graduate of the Wharton School of Business with degrees in Real Estate and Finance. He also holds a JD from Fordham University School of Law and is a member of the New York State Bar Association.