Cresco Capital Partners Archives - Green Market Report

StaffOctober 22, 2019
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Full name: Matt Hawkins

 Title: Managing Principal and Co-founder

 Company: Entourage Effect Capital (formerly Cresco Capital Partners, LLC) is a United States private equity investment firm, dedicated to investing in the cannabis industry.

 Years at current company: 5

 Education profile: University of Texas at Austin

Most successful professional accomplishment before cannabis:

Sale of a company owned by several partners and me.  Assets included a multi-hundred million dollar multifamily real estate portfolio.

Company Mission:  EEC’s mission is to actively leverage our sector and investment experience, networks, and investment process, to identify, invest and accelerate high quality emerging growth companies.  EEC stands apart by taking an active role in adding value to the management teams of its companies.  Some have called it a “Keiretsu”, as we are in Cannabis, we call it “the Entourage Effect.”  The Entourage Effect is a term used to describe a novel method of endocannabinoid regulation. It means that the compounds within the cannabis plant work in concert to create a sum greater than any of its individual parts.

  Has the company raised any capital (yes or no):

if so, how much?:

Since inception in 2014, the firm currently manages approximately $100 million in assets under management. EEC has invested in 32 companies with a total of 11 exits. Both prior funds consist of current and exited positions in some of the most recognizable names in the cannabis market including Acreage Holdings, GTI, MJ Freeway, Ebbu, Form Factory, and more.

 Any plans on raising capital in the future?

We just announced the launch of our Fund III with an initial target of $150 million, representing its largest fund to date. This is the third consecutive fund launched by the firm and when fully subscribed, will bring total assets under management to approximately $250 million. Fund III will target a diversified investment approach across the value chain including, but not limited to, science and bioscience, license aggregators, vertically integrated licensed operators and retailers as well as consumer packaged goods, biotech, ag-tech, media, technology and ancillary services. The fund is expected to invest directly in approximately [10 – 20] growth stage companies within target sectors over a five-year investment period and seven-year fund term.

 Most important company 5 year goal:

To be the most valuable name on our portfolio companies cap table and have funded the cannabis companies that will lead this industry.


William SumnerJune 6, 2019
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It’s time for your Daily Hit of cannabis financial news for June 6, 2019.

On the Site

Cresco Capital Partners

Cresco Capital Partners (Cresco Capital) announced today that it has closed an oversubscribed fund of $60 million. Founded in 2014, Cresco Capital was one of the first and largest private equity firms to focus solely on the legal cannabis industry.

Italian court bans cannabis derivatives, in blow to popular sector

Italy’s top court has banned the sale of cannabis products, on the heels of threats by the country’s deputy prime minister to close shops who sell legal derivatives of the plant. Deputy Prime Minister and far-right League leader Matteo Salvini had declared war on so-called “cannabis light” shops in the run up to the European Parliament elections.

In Other News

Harborside

Harborside Inc. has announced that it has filed its listing statement with the Canadian Securities Exchange and that it will begin trading shares of the company on June 10, 2019 under the ticker symbol “HBOR.” “The start of trading represents a significant milestone for Harborside, and we’re grateful for the support that we’ve received from the CSE throughout the process,” said Harborside CEO Andrew Berman. “We’re excited to move forward as a public company, with a vehicle that attracts growth capital from new investors, and continue maintaining Harborside’s status as California’s premier cannabis operator.”

PharmaCielo Ltd.

PharmaCielo Ltd. (TSXV: PCLO) has entered into an implementation agreement to acquire all of the issued and outstanding shares and listed options of the global medical cannabis company Creso Pharma Ltd. for A$122 million. Under the agreement, PharmaCielo will pay A$0.63 per share, which is a premium of 50% over the closing trading price of the Creso Pharma shares on May 31, 2019. “PharmaCielo’s acquisition of Creso Pharma, harnessing the synergies between us, creates a combined company that is poised to become a global powerhouse in the medicinal cannabis industry,” said David Attard, CEO of PharmaCielo. “Upon closing of the transaction, the combined company will quadruple our global footprint with presence in more than a dozen countries spanning North and Latin America, Switzerland, Europe, the Middle East, Australia and New Zealand.”

Aleafia Health

Aleafia Health Inc. (TSX: ALEF) (OTC: ALEAF) (FRA: ARAH) reports that it is offering 35,000 convertible debenture units of the company, at a price of $1,000 per unit, for a total of $35 million. Leading the offering is Mackie Research Capital Corporation and BMO Capital Markets, which is acting on behalf of a syndicate of agents including Canaccord Genuity Corp.  The proceeds of the offering will be used for working capital requirement and other general corporate purposes.

Medicine Man Technologies

Medicine Man Technologies, Inc. (OTCQX: MDCL) has entered into a securities purchase agreement for the sale of up to $14 million of the company’s common stock from an affiliate of the private equity firm Dye Capital & Company. The company will use the proceeds to fund growth initiatives. The company also announced a series of pending acquisitions, including MedPharm Holdings, Colorado’s first licensed cannabis research & phytopharmaceutical company; Medicine Man Denver; Los Sueños Farms,  North America’s largest sustainable cannabis farm; and Mesa Organics, a cannabis products manufacturing company. “Dye Capital is the right partner for our Company with a unique set of skills and experience in merger and acquisition transactions, integration experience, and scaling operations.  Our entire team is excited about teaming with Dye Capital,” said Medicine Man Technologies Co-Founder and CEO Andy Williams.


William SumnerJune 6, 2019
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Cresco Capital Partners (Cresco Capital) announced today that it has closed an oversubscribed fund of $60 million. Founded in 2014, Cresco Capital was one of the first and largest private equity firms to focus solely on the legal cannabis industry. Although the two names are similar, Cresco Capital is not connected to Cresco Labs (OTCMKTS: CRLBF), which is a vertically owned cannabis company operating in 11 U.S. states.

“Surpassing our original goal of raising $50 million for CCP Fund II by almost twenty-percent not only represents a significant milestone for Cresco Capital Partners, it serves to validate the leadership role we play in providing growth capital and advisory services to companies within the cannabis industry,” said Matthew Hawkins, Managing Principal of Cresco Capital Partners. “With the overwhelming success of CCP Fund II, we are preparing to begin marketing a third fund in which we hope to raise $200 million. This fund will continue to target investments in value-add opportunities in the legalized cannabis space both plant touching and non-plant touching.”

To date, the company has raised more than $85 million and has invested over $50 million in 32 cannabis companies through two funds, CCP I and CCP II, and co-investment vehicles.

The company’s portfolio includes a diverse set of cannabis companies, ranging from cultivation to ancillary services. Several of Cresco Capital’s most notable investments include MJ Freeway, PROHBTD, NorCal Cannabis Company, Sunderstorm, Phylos Biosciences, Sublime, Cellibre, and Harborside/FLRish Inc. Most recently, Harborside closed a C$19.5 million private placement of subscription receipts, with Cresco Capital as one of its investors.

So far, the company has achieved seven exits between its two funds; including Acreage Holdings (OTCMKTS: ACRGF) and Green Thumb Industries (CNSX: GTII); who recently closed the acquisition of Integral Associates, which holds multiple retail dispensary licenses in California and Nevada, as well as two cannabis cultivation and processing facilities.


StaffSeptember 20, 2018
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Batu Capital Investments, Cresco Capital Partners and existing investors participate in raise for the largest global cannabis tech company

Denver, CO – September 18, 2018/ AxisWire/ MJ Freeway, the company which invented seed-to-sale technology and has the cannabis industry’s first enterprise resource planning product, announced the completion of its $10 million oversubscribed Series C financing. The financing, which will accelerate MJ Freeway’s growth in advanced technological build-outs, centered around increasing new product features for businesses and governments. The round was led by Batu Capital Investments, a tech-focused multi-family office managed by Emery and Evan Huang. Cresco Capital Partners, a private equity investment firm dedicated to investing in the cannabis industry, also participated significantly.

“The industry is maturing rapidly and needs software that can handle increasing complexity, with state-of-the art functionality and data security,” said Jessica Billingsley, Co-Founder & CEO of MJ Freeway. “With adult-use permitted in 9 states and medical in 30 states, MJ Freeway is uniquely enabled to support regulation at every level. Indeed, we are — and have been — the backbone upon which the cannabis industry is built. We thank our new and existing investors for realizing the tremendous importance of our enterprise.”

“MJ Freeway’s technology is vastly superior to other offerings in the marketplace. It supports the full range of cannabis business operations – from cultivation to manufacturing to dispensary – with the industry’s first fully-integrated enterprise resource planning (ERP) product, MJ Platform,” said Emery Huang, Senior Partner of Batu Capital. “We believe MJ Freeway is the market innovator and will maintain its market dominance through a clear technological edge over the competition.”

“Cresco Capital Partners has made significant investments in the cannabis space since 2015, and we believe MJ Freeway is the clear leader in the cannabis supply chain management SaaS market, positioned for dominance,” said Matt Hawkins, Managing Principal at Cresco Capital Partners. “The company’s innovative product line and experienced management team led to our decision to invest in MJ Freeway’s unparalleled tech platform.”

About MJ Freeway

MJ Freeway® is the largest global cannabis technology company having tracked more than $10B in sales with clients in Australia, Canada, Europe, South America, Switzerland, and the United States in 23 states and the District of Columbia. Founded in 2010 by technologists creating tech specifically for cannabis businesses, MJ Freeway’s tracking software includes patent-pending inventory control and grow management applications to streamline workflow and increase efficiency. MJ Freeway’s Leaf Data Systems software solution enables governments to track cannabis plants from seed-to-sale and ensure patient, public, and product safety. MJ Freeway also offers a complete suite of professional consulting services for cannabis businesses.  For more information, visit mjfreeway.com.

About Batu Capital

Batu Capital is a multi-family office managed by Emery and Evan Huang. We look for opportunities in cryptocurrency, cannabis, and big data that constitute either game-changing technologies or are late-stage/pre-IPO enterprises that have built wide economic moats.

About Cresco Capital Partners

Cresco Capital Partners is a private equity firm that is focused on investing exclusively in the legalized cannabis space. The firm has deployed over $25MM in the industry since 2015 and is currently raising their second fund.  Fund II has made six (6) investments thus far and will close its raise at $50 million.  Led by an experienced team of private equity professionals, the firm’s principals have over 20 years of investment experience collectively within the legalized cannabis industry. 

Media Contact:

Jon Goldberg
KCSA Strategic Communications
Tel. 212.896.1282
Email: jgoldberg@kcsa.com

 


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