Codie Sanchez: Public Valuations Impact the Private Sector

Codie Sanchez, managing director at private equity investment firm Cresco Capital Partners, shared her criticism in a recent interview with the Investing News Network (INN) about the over estimation done for the public cannabis market as a private investor of the space.

Sanchez told INN there’s been a wide margin of volatility coming from the public markets when it comes to the estimations of value for cannabis companies. Sanchez was a featured speaker at the MJBizConINT’L event in Toronto.

“The public (market valuations are) nuts,” Sanchez told INN. “Why would I invest in somebody that’s trading at a valuation or multiple that is almost impossible for them to hit?”

As a private investor, Sanchez said the volatility seen in the public markets has created a variety of reactions to the private side of the industry.

“We haven’t necessarily seen very many down rounds or haircuts on the total amount that they can go and raise at but we certainly have seen companies have a harder time raising, which is good for us as investors and a pullback on some of the more ridiculous valuations we saw on the market,” Sanchez said.

The executive joined Cresco Capital Partners earlier this year. In June, the firm raised US$60 million in its oversubscribed cannabis private equity fund, the second fund for cannabis investment.

Matthew Hawkins, managing principal of the firm said, they are now planning a third cannabis fund with the goal to raise US$200 million. “This fund will continue to target investments in value-add opportunities in the legalized cannabis space both plant touching and non-plant touching,” he said.

Watch the interview above for more on what Sanchez had to say.

Don’t forget to look for the rest of our coverage of MJBizConINT’L, with exclusive interviews and more insights from the show. You can also follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.