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Introducing the Cultivated Investor Letter series

First up, we have MJ Reit CEO Chris Reece.

Hi everyone,

I’ve been thinking hard about ways to deliver extra value to paid subscribers like yourselves.

Most of you are either high-level investors or executives in the cannabis industry.

I want Cultivated to provide a platform where you can all network and learn from each other, as well as from my reporting.

With that, I’d like to introduce a new series I’ve been planning: The Investor Letter series.

So, what is it and why should you care?

At the end of each quarter or year, fund managers write to their investors about the state of the cannabis market, what went well, and what didn’t go so well.

As a reporting tool, I’ve always found these valuable to get a better sense of what trends I should be paying closer attention to (or potential targets to report on).

It’s a way to find a signal in the noise. 

That’s the guiding principle for this newsletter.

I want paid subscribers to have access to that information — in an effort to learn better from each other, and help you all become sharper investors.

It’s also an opportunity to communicate your ideas to the broader market outside of your own investors.

I’m looking for investors across different sectors: Private equity, venture capital, public equities, etc. I’m also looking for a range of perspectives, from contrarian to bullish.

If you’re up for sharing your letters, reply to this email and let me know. I want to post them without editing to encourage the honest sharing of wins and losses.

Let me know what you think.


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📝 The Investor Letter Series: MJ REIT CEO Chris Reece

To launch the series, MJ REIT CEO Chris Reece kindly shared his July letter wrapping up the first six months of 2023 with me.

What is MJ REIT?

Launched in August of 2022, MJ REIT is a real estate investment trust that provides accredited investors access to commercial real estate opportunities in the cannabis industry.

The firm finances, acquires, leases, and provides mortgages to retail and industrial cannabis facilities.

MJ REIT partners with Arcview Capital, a broker-dealer serving the cannabis industry, and the Rainbow Realty Group, which offers sale-leaseback and mortgage financing to cannabis companies in the US.

Who runs the firm?

  • Christopher R. Reece — CEO

  • Matthew Gould — Board Member

  • Michelle N. Galeski — Board Member

  • Matthew Malone — Board Member

  • Jeff Mallach — Board Member

Where do they invest?

The firm invests in states where cannabis is legal in the US. The firm targets a breakdown of 45% mortgages, 45% equities, and 10% liquid investments.

Here’s the executive summary:

  • Investing in cannabis remains challenging: In the US, cannabis is considered a Schedule I narcotic which puts traditional financing sources off-limits.

  • MJ REIT posted a strong quarter and year-to-date return, exceeding monthly targets.

  • Still, it was nowhere near the return of overall equity markets.

  • The broader market was driven by bullishness over AI.

  • TerrAscend’s TSX listing will provide more opportunities for all US cannabis companies.

  • Maryland and Missouri legalizing cannabis and beginning sales will create a strong need for the type of financing MJ REIT can provide.

  • The firm is actively looking at deals in those two states.

  • US commercial real estate is valued at around $21 trillion — the third largest asset class behind equities and fixed income.

  • Cannabis commercial real estate alone is valued at $50-$75 billion.

Read the full letter here: