Mohammed Hossain

On behalf of Pablo Zuanic, Mohammed Hossain of Zuanic & Associates LLC asked about the general BDC sector sentiment, potential regulatory changes, the evolution of the deal pipeline since the company's transition, and whether cannabis rescheduling news was causing clients to pause funding decisions.

Answer

CEO Peter Sack explained that while the BDC sector faces macro uncertainty, Chicago Atlantic's niche strategy provides insulation. He noted it is too early to speculate on regulatory changes but highlighted that the pipeline has expanded with non-cannabis deals and new cannabis opportunities like restructuring-driven asset sales and ESOP transactions. Both Sack and President Dino Colonna stated that rescheduling news has actually spurred capital demand, as operators are optimistic about growth and wary of past "head fakes" on federal reform.

Mohammed Hossain, on behalf of Pablo Zuanic, asked about the general market sentiment for the BDC sector, potential regulatory changes, the evolution of the company's deal pipeline since its time as Silver Spike BDC, and whether cannabis rescheduling news has caused potential clients to pause funding plans.

Answer

CEO Peter Sack stated that Chicago Atlantic's niche strategy insulates it from broader BDC market uncertainties and that it's too early to speculate on regulatory reforms. He highlighted that the pipeline has expanded with non-cannabis opportunities and new cannabis deal types, such as asset sales from restructurings and ESOP transactions. Both Sack and President Dino Colonna noted that rescheduling news has actually increased client optimism for growth, rather than causing a pause, as operators are accustomed to regulatory 'head fakes'.

Asked about the company's plans for handling its 2025 debt maturities, whether the long-term goal of 100 stores in Colorado has changed, and the company's stance on pursuing 280E tax refunds.

Answer

The company is actively working on its debt maturities and is optimistic about refinancing opportunities given improving operations, while also being open to equity. The 100-store goal remains but the timeline has been elongated due to challenging market and regulatory conditions. The company is actively working on filing amended tax returns to claim 280E refunds, which they believe will provide a significant cash flow benefit.