Is there a legal risk in investing in the cannabis industry?
Good Tree Capital does not touch the plant, which means we are not subject to the same enforcement risks as those who touch the plant.
Additionally, existing law protects licensed medicinal cannabis companies from federal prosecution. The Rohrabacher-Farr Amendment prohibits the Justice Department from interfering with states’ implementation of their medicinal cannabis laws. We lend to medicinal cannabis operators.
Recreational-use cannabis companies are technically open to federal prosecution; however, the Justice Department has met strong resistance when attempting to crack down on states that have legalized recreational-use cannabis.
We estimate the legal risk to investing in the cannabis industry, and specifically in Good Tree Capital, to be negligible.