Investment manager fund Chicago Atlantic recently acquired Silver Spike Investment Corp. SSIC, the only SEC-approved business development company (BDC) focused on lending to the cannabis industry.

As a result, Silver Spike has been renamed Chicago Atlantic BDC, Inc., and its ticker symbol will change to $LIEN on October 2, 2024. Chicago Atlantic originates senior secured loans to state-licensed cannabis operators and has consistently traded at a premium.=

“Chicago Atlantic seeks to capitalize on opportunities in private markets by providing debt capital to lower middle-market companies, typically non-sponsor, and unique industries facing structural reasons for an insufficient supply of capital,” said the company’s new CEO, Andreas Bodmeier.

Significant Timing For Cannabis Investors

The acquisition comes at a critical moment for the cannabis industry, as both presidential candidates are signaling support for marijuana reform, rescheduling of cannabis could boost cash flow in the sector. This shift will likely benefit the company’s cannabis-focused lending platform.

“We are excited about the prospects for further growth within our core activity of providing capital to high-quality operators within the cannabis ecosystem,” said Scott Gordon, executive chairman and co-chief Investment Officer. “As one of the largest direct lenders to the sector, we see significant potential to continue playing an important role in shaping the flow of much-needed debt financing to the industry.”

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Unique Market Opportunity

The merger also creates a unique opportunity for investors.

Chicago Atlantic BDC allows access to credit alpha that differs from traditional BDCs or private credit funds. Bodmeier pointed out the value of this position, noting that “the rapidly growing cannabis sector represents a compelling example of an industry where capital is in short supply.”

This acquisition and joint venture between Chicago Atlantic and Silver Spike are expected to strengthen the company’s role in providing financing solutions to cannabis operators.

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