Exclusive: Cannabis Fund Rainbow Realty Raises $47M, Including $10M From CrowdStreet
Rainbow Realty Group (RRG), a real estate investment firm focused on the U.S. cannabis industry, has completed a $47 million fundraise, Benzinga has learned.
Of that total, $10 million was raised from nearly 200 individual investors via CrowdStreet, a real estate investing online marketplace.
The New York-based firm assures this is the first-ever commercial real estate loan and equity investment for a cannabis-focused real estate fund in the U.S.
RRG intends to deploy the capital into properties valued between $5 million and $15 million.
An Emerging, Fragmented Market
“The cannabis real estate market is emerging yet it remains fragmented,” RRG President Kyle Shenfeld told Benzinga exclusively ahead of the company's official announcement.
The market is one that, at least for the time being, cannot be served by institutional investors, Shenfeld explained. Thus, the opportunity for private equity real estate investment is vast.
“Historically, we have raised opportunistic capital in other ways — primarily through the public markets," he added. "Given the lack of institutional investors in the world of cannabis, venture online syndication to an expanded network of individual real estate investors made perfect sense. Our team shares an entrepreneurial spirit with CrowdStreet and we are excited to work with them on a second fund."
The Business Model
RRG’s mission is to provide cannabis operators with capital via sale-leaseback transactions and senior secured mortgage facilities.
Ilya Gamer, managing director of CrowdStreet, praised RRG's cannabis real estate fund for having "a truly unique offering."
"We’ve been pleased to bring a diversity of opportunities, including fresh new asset types, to investors on our online platform," Gamer said. "The cannabis market is thriving, expanding, and may consolidate at some point. The potential opportunity for real estate investors to participate and build wealth along the way is considerable.”
RRG has leveraged eight years of experience in cannabis real estate, and 60 years in the real estate business.
Image from the company website.
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