Photo by Inception Cos.

LOS ANGELES–Private investment firm The Inception Cos. has launched Inception REIT with the goal of providing real estate debt and equity capital to medicinal and adult-use cannabis businesses. I-REIT, as the REIT is called, has secured commitments from several real estate investors and executives and expects to raise up to $50 million from institutional and individual accredited investors during its initial offering.

The company maintains it is filling a much-needed void in this space as cannabis-related businesses have limited access to traditional financing sources, with even the most established state-licensed businesses having to sell equity or use short-term hard money loans to raise capital.

These financing challenges, combined with the complexity of zoning and land use regulations, Inception says, has created significant leasing and trading premiums for real estate assets. “Even though 92% of states already have cannabis access laws, institutional capital is still not widely available,” says Omar Mangalji, co-founder of Inception, in a prepared statement.