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Executives at High Times, a New York publication that has covered the marijuana scene for four decades, are launching a new private-equity fund expected to boost Colorado's newest industry.
The HT Growth Fund plans to raise $100 million over the next two years to invest in cannabis-related businesses.
With Colorado the first state to legalize the sale of recreational marijuana, firms based here are in line to snag a large share of that investment money.
"What we are looking to do is provide capital and credit to companies that are established and have grown and reached their potential as much as they can without access to traditional capital markets," said Michael Safir, managing director of the new fund and former business manager of High Times.
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Investments are expected to be from $2 million to $5 million per company, making HT Growth more of a venture-capital or private-equity firm rather than an angel investor.
Safir said the fund is looking for "best of breed" businesses with strong management teams. Although it will consider marijuana cultivation and retailers, the fund's focus will be primarily on ancillary businesses.
"If you are running a cannabis business, you aren't getting (a Small Business Administration) loan, you don't have bank accounts," Safir said. "It is hard to grow when you don't have the tools."
Though a separate entity from High Times, the fund will use the expertise the company has built up over the years to pick investments and advise management teams on strategy. Other than the investments targeted, HT Growth will operate like a traditional private-equity fund, Safir said.
Other firms have announced plans to handle early-stage funding. California-based ArcView Investor Network, which matches entrepreneurs and investors, said in late September that it planned to provide more than $1 million to marijuana-related companies in Colorado.
Denver-based MassRoots, a social network for the medical-cannabis community, said Thursday it had closed on a $150,000 seed investment from ArcView.
ArcView estimates that the country's legalized cannabis market, valued at $1.44 billion last year, could grow to $2.34 billion this year and reach $10.2 billion over the next five years as other states join Colorado and Washington in legalizing recreational marijuana use.
Aldo Svaldi: 303-954-1410, asvaldi@ denverpost.com or twitter.com/aldosvaldi
