With SAFE Banking legislation expected to be reintroduced in Congress on Thursday, cannabis investors are rife with anticipation. If SAFE Banking is eventually passed by the Senate and signed into law by president Biden, investors can expect positive spillover effects for the industry. As such, TDR reached to Matt Hawkins from Entourage Effect Capital, LLC e to give us his expert take on the roadmap which lies ahead.
Matt Hawkins is a Managing Partner at Entourage Effect Capital—formerly Cresco Capital Partners—a private investment company based in the United States that specializes in cannabis industry investments. His company was an early pioneer in the sector, having allocated over $200 million into 65 companies since 2014. Like many cannabis executives such as TerrAscend CEO Jason Ackerman, Mr. Hawkins believe the U.S. cannabis industry is still in the early innings of growth.
Entourage Effect Capital has helped both large and small cannabis companies attain financing in a restricted banking environment. In June 2019, the firm closed an oversubscribed $60 million fund known as CCP Fund II which invested in prominent California operator Harborside Inc (CNSX:HBOR) (OTCMKTS:HBORF). Entourage has also achieved has achieved seven financing exits across multiple funds including major cannabis operators such as Acreage Holdings, Green Thumb Industries, Ebbu (acquired by Canopy Growth) and Form Factory.
Entourage Effect Capital prefers to take an active role in its investments, by providing structured finance services, advisory and networking opportunities for portfolio companies.
Last month, Matt Hawkins opined that passing the STATES Act should be a top priority, and could mirror current policies that govern the alcohol industry. While he doesn’t expect that to happen right away, passing a SAFE Banking would be a critical next step in normalizing cannabis from a banking perspective, with federal legalization the eventual logic extension of such policies.