Pot-Focused Finance Company Reports Higher Investment Income, Projects 'Increase In Cannabis Capital Markets Activity' Following DEA Rescheduling

Zinger Key Points
  • Cannabis-focused specialty finance company Silver Spike reported a Q1 investment income of $2.8 million, versus $2.5 million in Q1 2023. 

Silver Spike Investment Corp. SSIC, a specialty finance company that has elected to be regulated as a business development company, announced its financial results Friday for the first quarter ended March 31, 2024.

"It was recently reported that the U.S. Drug Enforcement Administration is moving to reclassify cannabis to a Schedule III substance under the Controlled Substances Act, a potentially historic shift in federal regulation of the cannabis industry," stated Scott Gordon, chairman and CEO of the company. "Although timing is uncertain, this shift would be a major step forward for the cannabis industry and should have a positive impact on cash flow for cannabis operators, as they would no longer be subject to Section 280E of the Internal Revenue Code, which prohibits the taking of deductions for businesses that engage in trafficking of controlled substances listed in Schedule I or Schedule II."

Gordon continued, "Based on this news and an expected acceleration in refinancings, we anticipate an increase in cannabis capital markets activity in the second half of 2024. We believe that we will have the ability to deploy capital to new portfolio companies with favorable risk/reward characteristics for the foreseeable future, as the demand for capital will outweigh the supply."

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Q1 Financial Highlights

  • Total investment income of $2.8 million, versus $2.5 million in the same quarter of 2023.  
  • Net investment loss of $79,809, or $0.01 per share, which compares to a net loss of $1.34 million, or $0.22 per share in the first quarter of 2023.  
  • Investment portfolio of $54.8 million at fair value, compared to $54.1 in the same period of last year.  
  • Net asset value per share decreased from $13.77 on December 31, 2023 to $13.60 on March 31, 2024
  • A cash dividend of $0.25 per share was declared. The dividend is payable on June 28, 2024, to stockholders of record on June 20, 2024.  

Price Action 

Silver Spike shares close Thursday's market session 1.22% lower at $11.32 per share. 

See Also: Mortgage And Property Finance Giant’s $354M Portfolio: Growth Amid Cannabis Sector Volatility

Photo: Courtesy of Branding Pot via Shutterstock

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