Rob Sechrist, co-founder and president of Pelorus Capital Group LLC, drives the firm’s strategy in new markets, forms equity partnerships, and oversees the Pelorus Fund’s assets. With 25 years of real estate lending experience globally, he previously chaired JRS Capital USA, Inc. and founded Stinger Wakeboards. Rob holds a BA from San Diego State University and various licenses, including California Real Estate Broker and NMLS. He is designated as an expert witness by the Ninth Circuit District and Bankruptcy Courts.
Episode Highlights Here:
Brett
Rob, what is the number one secret to financing cannabis investments?
Rob
Well, the number one secret that you would need to know is that you need to tie up the cannabis use license that may or may not be related to your borrower. So if your borrower is the property company to prop co we’d refer to it the ACO which may or may not be read related would be the tenant. And that value of that property is derived from that cannabis use slice and so you must tie that up in the transaction and it’s a very technical and tricky way to do it. And it’s different in every single state of how you achieve that. But that’s the number one most important thing.
Brett
Okay, make sure I got that it says you must tie up the license related to the borrower. Okay. Operator relates to the operator Okay, ready? So the operator and so it’s it’s, you know, I think in traditional finance, you must secure the loan to the asset and the asset being they’ll say the real estate, and what you’re saying here is really the asset perhaps CES is the license, right? You want to make sure you walk me through that.
Rob
Yeah, so to clarify, so we do secure a first lien on the real estate. But in addition to that, to have the highest and best use of this highly specialized asset class, it’s most similar to cold storage data centers or lab space. In this particular sector, you must tie up the license as well of the cannabis operators so that that way you can operate that property, the highest and best use for cannabis business.
Brett
Okay. In other words, let’s imagine they went sideways and were doing the things they shouldn’t be doing and the way they should be doing with all the regulation that’s around it. You’ve got the ability, I guess, to correct me if I’m wrong, maybe to foreclose or take that over as an operator and start to run in the proper way. Is that a fair summary? Rob?
Rob
That’s correct. So it may or may not be us directly. But, you know, you want to be able to monetize that, that value of that property by putting in another cannabis use tenant to replace them.
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About Rob Sechrist
Rob Sechrist is the co-founder and president of Pelorus Capital Group LLC.
In his role at the firm, Rob is responsible for driving Pelorus’ strategy in new markets, developing alliances with private and institutional investors, forming equity partnerships and overseeing the Pelorus Fund’s assets under management. Rob serves as a co-manager of the Pelorus Fund.
Key experience: Rob has 25 years of experience in real estate lending in the United States and internationally. Prior to co-founding Pelorus, Rob served as chairman of the board of JRS Capital USA, Inc. He was also the CEO and founder of Stinger Wakeboards.
Education: BA from San Diego State University; California Real Estate Broker’s License; NMLS License Holder; Ninth Circuit District and Bankruptcy Courts designated expert witness.
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