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Los Angeles-based private equity fund MedMen is seeking investors for its marijuana business.
The fund, which is co-chaired by former BlackRock executive Chris Leavy, is looking to raise $250M to grow and sell pot in Los Angeles, Las Vegas and Manhattan.
Last year, MedMen managed to raise $60M for its first pot fund. If the fund reaches its latest goal, it would be one of the biggest investments yet in the budding marijuana sector, Bloomberg reports.
But finding investors may prove to be an easier task than finding suitable locations to set up shop.
When it comes to cannabis-related businesses, there are a number of stipulations. Businesses have to be a certain distance away from community centers, including schools and religious institutions, meaning nailing down property can be a bit of a challenge.
The industry still faces much scrutiny since it is illegal under federal law and is barred from the majority of banking services. These factors could also make it a profitable investment. While the legal cannabis market is valued at $6B and is expected to reach $50B by 2026, assets tend to be cheaper because fewer investors are willing to invest due to the potential risk involved.
MedMen’s management group and two funds currently own or operate 11 businesses, including eight dispensaries, two growing facilities and one manufacturing plant.
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