Chicago Atlantic Real Estate Finance, Inc. is a newly formed commercial real estate finance company or REIT. The current portfolio is mostly first mortgage loans to state-licensed operators in the cannabis industry. The company expects the IPO to be priced between $16.00 and $18.00 per share and could raise as much as $129 million. It has applied to list the common stock on the Nasdaq Global Market under the symbol “REFI”.

The existing portfolio contains loans to companies with operations that are geographically concentrated in Arizona, Florida, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Ohio, Pennsylvania, and West Virginia. The current investment strategy includes a focus on providing loans to companies with operations in states that limit the number of cannabis license issuances in order to protect the value of the collateral, circumstances and developments related to operations in these markets that could negatively affect its business.

According to the company’s filing, as of November 22, 2021, it had originated and closed 30 loans totaling approximately $649 million to companies operating in the cannabis industry, had approximately $318.3 million of loans outstanding and were committed to funding approximately $120 million in additional loans under commitments from existing credit facilities (subject to customary closing conditions), with approximately $98 million of potential loans under executed non-binding term sheets in various stages of underwriting and loan documentation. The interest rates range from a low of 7% to 15% and all the loans have prepayment penalties.

The company said it had reviewed over 500 cannabis loan opportunities, of which 30 loans have been funded, and, as of November 22, 2021, were evaluating 45 loan opportunities representing potential total loan commitments of approximately $882.9 million. “We believe our relationship with our Manager benefits us by providing access to a robust pipeline of potentially actionable opportunities, an extensive relationship network of cannabis industry operators and other real estate loan opportunities and significant back-office personnel to assist in the origination and management of loans.”

“We expect cannabis lending will continue to be a principal investment strategy for the foreseeable future; however, we expect to also lend to or invest in companies or properties that are not related to the cannabis industry if they provide return characteristics consistent with our investment objective. We are externally managed by Chicago Atlantic REIT Manager, a subsidiary of Chicago Atlantic Group.”