Hedge funds are but one of the many investment vehicles available to those with disposable incomes (and, in the case of the union pension funds that routinely sink most of their available cash into such funds, incomes that are not at all disposable). But, more so than private equity or other investments, hedge funds have become synonymous with \u201cwealth in America\u201d \u2014 and with good reason. Hedge funds are open only to the already-wealthy: Accredited investors (read: people with lots of money) and institutional investors (read: entities like university endowments with biblical floods of money).<\/p>\n
Think of privilege, think of class \u2014 think of the walnut-walled rooms in exclusive clubs, think of long windows with expansive views of skylines \u2014 and you can think of a\u00a0hedge fund<\/a>.<\/p>\n For now, hedge funds have very little to do with the burgeoning marijuana industry. There is a reason for this. By design, hedge funds provide their investors with diversified risk. Exposure is balanced between high and low-risk\u00a0 investments, so that investors can literally \u201chedge\u201d their bets (hence the name).<\/p>\n Cannabis is almost always high-risk \u2014 and as a result, cannabis investments are almost entirely held by so-called \u201cretail investors,\u201d not accredited big-boys or the even bigger institutional funds \u2014 but that, too, is changing, as one still-new marijuana-focused hedge fund is demonstrating.<\/p>\n According to an item published in Bloomberg<\/a>, Sean Stiefel, a 30-year-old New York-based investor, founded Navy Capital Green Fund in 2017 with the intention of convincing institutional investors that it\u2019s past time to bet on cannabis. And if you believe him, he\u2019s done quite well: He started a little more than a year ago with $10 million and has increased his \u201cassets under management\u201d (the size of the fund he\u2019s managing) to $100 million.<\/p>\n Navy Capital has done this in part by making investments that, while appearing beyond obvious today, the fund nearly passed on at the time. A prime example is chief investment officer John Kaden\u2019s reaction to the call from a Canadian broker who told them to take a look at the company\u00a0Uruguay<\/a>\u00a0selected to produce recreational marijuana.<\/p>\n \u201cI mean, cannabis in Uruguay?\u201d was Kaden\u2019s reaction, he told Bloomberg. Somehow, they bit \u2014 mostly because of the company\u2019s staggering growth protections \u2014 and, within four months, they managed to quadruple their investment. Since then, the company has invested mostly in Canada, but also has holdings in Europe, Israel, Australia, and the United States. (Of those places, the U.S. is the lone outlier in still banning medical marijuana on a federal level.)<\/p>\n However, Navy is still operating on a \u201cbleeding edge\u201d other much-bigger funds won\u2019t touch. Big money is conservative by nature, and \u201cpublicly listed mutual fund(s) and union pension fund(s)\u201d simply have too much to lose, Bloomberg observed. The risk posed by an untimely visit from federal regulators or a federal law-enforcement official with something to prove is simply too great.<\/p>\n Another complication is that for all of marijuana\u2019s promise as a high-growth, high-capacity market arena, it\u2019s still too small time for truly huge money. Cannabis is \u201cnot going to move the needle\u201d for big-time funds like Blackstone, said Kaden. \u201cThey have to be able to deploy $1 billion to move the needle and right now it\u2019s hard to deploy a couple hundred million\u201d in cannabis.<\/p>\n Indeed, some of the very largest cannabis investments to date measure in the nine figures:\u00a0Constellation Brands<\/a>, an alcohol company that owns Corona and other brands, made major waves in the fall\u00a0when it paid U.S. $191 million for a 9.9 percent stake in Canopy Growth<\/a>, the darling of the Canadian stock markets that made history as the\u00a0first weed unicorn with staying power<\/a>.<\/p>\n More investments of that kind are almost certain to not happen until U.S. federal law changes. Big money-holders are \u201call interested in getting educated, but they don\u2019t feel necessarily compelled to jump in yet,\u201d said Morgan Paxhia.<\/p>\n Paxhia is the co-founder, with his sister Emily, of Poseidon Asset Management, which claims about $60 million of assets in the cannabis space. For now, they\u2019re running funds mostly for high-net-worth individuals and not large funds \u2014 but that in itself is telling. Holders of big wallets with cash to burn are finding returns in cannabis. Small hedge funds are catching on \u2014 which means it\u2019s only a matter of rapidly decreasing time before the largest depositories of wealth on the planet think cannabis can work for them.<\/p>\n TELL US<\/strong>, would you invest in a cannabis company?<\/p>\n The post Hedge Fund Interest Shows Big Money Slowly Turning to Marijuana<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
Hedge funds are but one of the many investment vehicles available to those with disposable incomes (and, in the case of the union pension funds that routinely sink most of their available cash into such funds, incomes that are not at all disposable). But, more so than private equity orContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[50,4970,2177,170,4971,356,712],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/27875"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=27875"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/27875\/revisions"}],"predecessor-version":[{"id":27876,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/27875\/revisions\/27876"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=27875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=27875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=27875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nRead More: Hedge Fund Interest Shows Big Money Slowly Turning to Marijuana<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"