PE HUB Wire Highlights, 11.1.18


Photo of Luisa Beltran, PE HUB Senior Editor, courtesy of Buyouts Insider.

Ex-OTPP execs launch Peloton Capital and seek C$600 mln for debut; Lion eyes single-asset process for frozen-foods group Picard; Harvard endowment’s PE generates highest return for 2018 on lower allocation

It’s Thursday, Hubsters. What are you going to do with all the leftover Halloween candy?

Earlier this week, I came upon two GPs talking about marijuana legalization. Our neighbors up north have made it legal for their citizens to use recreational pot.

Canada’s legalization is expected to fuel a huge boom in cannabis businesses in that country as well as for all the accompanying products and companies serving the industry, one of the executives said. One of the reasons why? Canadian marijuana businesses are able to use the Canadian banking system. Here in the U.S., several states — including Alaska, California, Colorado, Maine, Massachusetts, Nevada, Oregon, Vermont and Washington — have legalized recreational marijuana. But cannabis companies here cannot use banks because it’s not legal federally. In fact, banks that handle marijuana companies can be charged with money laundering, according to The Economist. One of the GPs told a story about two cannabis companies that were looking to do a deal and showed up to meetings with “suitcases full of cash.”

With legalization, Canadian marijuana companies don’t have this problem anymore. “Canadian businesses [will be able] to scale in a way that U.S. companies cannot, under current legislation,” the exec said.

Another positive outcome is Canadian legalization should spur an uptick in clinical trials for medical usage of marijuana to treat pain relief, anxiety, etc. “This is going to be a rocket ship” for Canada marijuana companies, the exec said.

On a side note, Michigan will be voting next week on whether recreational marijuana should be legalized.

Hubsters, are any fintechs working on this problem? Which ones? What are the prospects? Let me know at [email protected]

New firm alertSteve Faraone and Mike Murray, formerly with Ontario Teachers’ Pension Plan, have launched Peloton Capital ManagementSee our brief here.

Kirk Falconer has the scoop on Peloton, including info about its debut fund. Find out how much they’re seeking here.

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