Capital For Cannabis: Family Office Investing
Equity capital is scarce in cannabis, but deals are still being done. Perhaps the only source of high risk capital comes from angel investors and Family Offices. A FO is a private wealth management firm established by an ultra-high-net-worth family. It provides the family with a selection of personalized services including investment management and financial planning.
Data is lacking but it is clear FOs have been a major source of cannabis financing, through both equity and lending vehicles.
FOs begin with around $150-$250M in assets under management. They can reach billions of dollars of investable capital.
According to CNBC, FO’s will surpass hedge funds in size by 2030, hitting $5.4T in assets (versus ~$4T today).
Without a doubt, FO investing goals, allocations and sentiments matter to cash-starved cannabis operators looking for growth and working capital.
What are FOs thinking?
UBS, a large wealth manager, surveyed 317 global FOs in their 2025 report. They looked at current investment allocations and where these are headed in 2025.
Some report highlight include:
1️⃣ Blue chip equites & fixed income instruments still dominate portfolio make up
In fact, the share of total capital devoted to equites and FI will increase from 30%/18% in 2024 to 33%/19% respectively in 2025.
2️⃣ Many FOs have bespoke investing approaches
Despite similarities, there is also a wide variance in missions and investment strategies. Cannabis firms should find FOs with higher risk tolerances, a social equity purpose or ones who follow contrarian or hidden value investment strategies.
3️⃣ Alternative investments are an important portion of investable assets
FOs now have 46% of their equity assets portfolio in alternative investments like private equity and emerging sectors. However, this percentage is expected to decline by 10% in 2025 reflecting a flight to safer financial harbours.
4️⃣ Private debt is a small but emerging asset class
Though only 4% of investable capital in 2024, private debt is expected to increase to 5% by 2025. A one percent increase equates to $10B in new lending.
5️⃣ Cannabis faces a lot of competition for $$$
FO have many petitioners for their risk capital including sexy sectors like AI, crypto and healthcare, plus the likes of real estate, hedge funds and precious metals.
6️⃣ FOs are active but discerning investors
62% of family offices made at least 6 direct investments in 2024, with 71% planning to make the same number of direct deals in 2025.
Better understanding your investor target can help you run a more effective and efficient capital raising process.
Call me. I help companies develop smart funding strategies, create differentiated investor narratives and run effective fundraising processes.
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