Category: Scythian News

Scythian Real Estate is a full-service real estate company that appeals to experienced cannabis operators in the untapped cannabis real estate market. Scythian works with cannabis companies that need assistance with raising capital, acquiring retail properties, and managing real estate assets.

Colorado Cannabis Operators Look to Raise Funds in Sale-Leaseback Transactions

When the Colorado legislature passed House Bill 1090 in November 2019, it set the stage for cannabis companies to gain access to financing from new sources. Prior to the passage of the law, Colorado marijuana businesses could only be owned by private companies with a limited number of owners. Once the law went into effect, however, publicly traded corporations and private funds could hold ownership stakes in Colorado cannabis businesses. This opened the door for publicly traded corporations outside Colorado to invest in local dispensaries with state licenses.

Despite the increased opportunities available to cannabis companies looking to operate in Denver, Aurora, Fort Collins, Pueblo, and elsewhere in Colorado, the reality is that most cannabis operators would still prefer to raise funds through sale-leaseback transactions. Randy Roberts, a partner at Scythian Real Estate, said that the Denver-based real estate investment company continues to generate interest from sophisticated cannabis operators who simply do not want to part with equity in their companies. Moreover, observed Roberts, it is still difficult for these types of businesses to raise money through traditional avenues because “not a lot of [financial] institutions are willing to do deals with cannabis companies.”

Scythian Real Estate Continues to Close Deals with Marijuana Businesses During COVID-19

Some marijuana dispensaries have been adversely affected by the coronavirus pandemic. In fact, more than a few smaller operators have been forced to temporarily close due to high operational costs. This is one reason why Scythian Real Estate prefers to work with well-established cannabis operators: these larger companies are less likely to be impacted by COVID-19 and can handle the increased costs of running their businesses during the pandemic. For investors in the Scythian Real Estate Fund, this is good news: the cannabis real estate fund has a deal pipeline that remains strong, with recent deals closed in North Dakota and Pennsylvania.

Additionally, when state governments responded to the pandemic by declaring dispensaries as “essential businesses” that could remain open despite stay-at-home orders, the move sent a powerful message to states where marijuana has not yet been legalized. According to Scythian Real Estate partner Randy Roberts, these other states may now feel more pressure to legalize cannabis for recreational and medical purposes as the marijuana industry becomes less stigmatized. Roberts noted that this could be extremely good news for investors in cannabis real estate funds that team up with “really well-capitalized, strong cannabis companies” because those companies are going to have opportunities to grow by expanding into new markets and by capturing additional customers in existing markets.

Scythian Is Preferred Cannabis Real Estate Partner of The Green Solution

Scythian Real Estate maintains an excellent working relationship with The Green Solution, which is one of the largest vertically integrated cannabis companies in the entire country. Scythian’s role in most of its deals is to identify, evaluate, acquire, and own real estate assets before leasing back those assets to The Green Solution. With added capital, The Green Solution is then in a better position to operate their retail dispensaries and to expand their operations into states where cannabis is medically and/or recreationally legal.

The Green Solution’s co-founder Kyle Speidell recently commented on the economic benefits of the cannabis company’s sale/leaseback deals with Scythian Real Estate: “It’s honestly a no-brainer economically.”

Contact Scythian Real Estate Today

If you are a cannabis operator looking to raise funds, or if you simply want to get involved in the cannabis market, Scythian Real Estate Fund LLC may be able to assist you. To learn more, contact Scythian.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Scythian Real Estate continues to make deals to acquire cannabis properties and partner with established dispensary operators during the COVID-19 pandemic. While many businesses find themselves slowing down as they wait for the coronavirus crisis to subside, Scythian Real Estate remains an active investor and a leading voice in the cannabis industry.

Cannabis Companies Look to Access Capital in COVID-19 Pandemic

The onset of the coronavirus pandemic presented cannabis retailers across the country with a unique opportunity to remain open while many other businesses were forced to temporarily close their doors due to mandatory shutdown orders. That’s because states declared that cannabis dispensaries are “essential businesses.” However, cannabis stores also face unique difficulties during the pandemic because businesses that sell marijuana have long been ineligible to receive any kind of federal aid, which means that congressional bailout packages and government financial assistance cannot be directed toward these small businesses.

The COVID-19 crisis has magnified a major problem for cannabis companies: it is often difficult to access capital because the federal government has not yet legalized marijuana and therefore banks do not offer financing for these types of businesses. This can also make it hard for marijuana retailers when it comes to securing and maintaining real estate for their operations because traditional mortgages are simply unavailable. The implications for cannabis operators can be devastating: a landlord might abruptly change the terms of the rental agreement or, in the worst cases, unexpectedly cancel the lease and put the cannabis company’s license in jeopardy.

Marijuana Businesses Raise Money Through Sale-Leaseback Deals

So, how do cannabis companies navigate these financial obstacles? One option available to these types of businesses is to use their own cash to purchase the land on which the stores will operate. However, this can leave a cannabis business with a lot of real estate on their balance sheets and severely diminished cashflow. This is why a lot of cannabis operators choose a different option: entering into sale-leaseback deals with privately held real estate funds.

Scythian Real Estate Provides Capital to Cannabis Operators

Scythian Real Estate is a Denver-based company that specializes in cannabis real estate. Scythian works with sophisticated cannabis operators in Colorado, Pennsylvania, North Dakota, and throughout the United States to ensure that retail dispensaries have access to capital and land on which to operate. Scythian Real Estate Fund LLC enters into sale-leaseback transactions in which Scythian purchases the property and then leases it back to the cannabis operator. These kinds of non-dilutive transactions are highly desirable for cannabis operators because they allow the companies to raise money without sacrificing equity. These deals also free up the cannabis retailer to focus on the day-to-day operations while Scythian manages the real estate portfolio and provides assistance with zoning and licensing matters, building renovations and improvements, and any other issues that might arise.

Scythian Real Estate Has Large Portfolio of Cannabis Properties in Colorado, Pennsylvania, and Across U.S.

Scythian Real Estate partners Ryan Arnold and Randy Roberts completed their first cannabis real estate deal in 2014 when they provided capital to a marijuana retail operator that needed property in order to secure a recreational marijuana license in Silver Plume, CO. Since then, the Scythian Real Estate Fund has grown considerably, with Scythian serving as the preferred real estate partner of The Green Solution. More recently, Scythian acquired properties operated by Grassroots Cannabis in North Dakota and Pennsylvania. These acquisitions bring Scythian’s asset portfolio up to 19 properties and a total value of around $40 million, and all asserts were purchased using equity as opposed to debt.

“We really like the idea of being one of a few doing these types of deals.”

Randy Roberts, Scythian Real Estate partner

Contact Scythian Real Estate About Cannabis Property Sale-Leaseback Deals

Scythian Real Estate is a trusted partner of cannabis operators that are looking to access capital to expand their operations. For more information, email Scythian.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Scythian Real Estate, a Denver-based cannabis real estate company, has acquired two dispensaries in North Dakota. Scythian purchased the properties from Grassroots Cannabis.

North Dakota Marijuana Dispensaries Acquired in Sale-Leaseback Deal

The total size of the lots acquired in the real estate deal is more than 9,000 square feet, and the two cannabis properties come in at a combined cost of $3.4 million. The first property is located at 310 US-2 in Devils Lake and was recently upgraded as part of a major renovation. The second property is located at 318 24^th St. East in Dickinson and first opened as a dispensary in December 2019.

Scythian Real Estate Partners with Grassroots Cannabis

The partnership between Scythian Real Estate and Grassroots Cannabis is expected to be a fruitful one. Scythian specializes in cannabis real estate acquisitions and long-term lease agreements, while Grassroots is one of the largest multi-state cannabis operators in the entire country. Scythian Real Estate Fund LLC has an investment portfolio of marijuana retail properties valued at roughly $40 million. Several of these assets are located in Colorado and are operated by The Green Solution, one of the most sophisticated cannabis retail businesses in the U.S.

Randy Roberts, a partner at Scythian Real Estate, stated that “Scythian is committed to working with cannabis operators like Grassroots Cannabis that have a proven track record of success.” Roberts added, “Both of these locations are well-positioned to support the long-term growth of Scythian’s portfolio as we continue to identify opportunities with highly sophisticated operators in quality markets.”

The two North Dakota properties acquired by Scythian in this sale-leaseback deal have already been leased back to Grassroots Cannabis, which will continue to operate the locations as dispensaries under the name Herbology.

Contact Scythian Real Estate Today

Scythian Real Estate has built a strong real estate portfolio of assets located in states where cannabis is legal for either recreational or medical use. To learn more about Scythian’s existing acquisition pipeline, send an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.