AFCG - Earnings call transcript Q3 2021

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Operator

Good morning. My name is Kree, and I will be your conference operator today. At this time, I'd like to welcome everyone to the AFC Gamma Q3 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be question-and-answer session [Operator Instructions] Thank you. to conference like speaker. to now would turn over the your I

may begin. You now

Gabe Katz

Kree. thank Kaufman, Leonard Thank the morning of of Good you, and Tannenbaum, Robyn Financial am Officer; Kalikow, Head this Officer. Real Executive Estate; call. and you joined morning Chief Chief by Brett Tannenbaum, Origination; Jonathan Head our I joining for

is anticipated note included Before presentation. we and the results performance. press that projected posted reflect information financial could is is in these statements in to being with section Gamma’s These materially company’s statements October forward-looking statements. call to are respect the of release begin, and and third call those I inherent along website conditions, projections on and cause XXXX future that size, would other Relations Investor predicting at investor market results recorded. uncertainties in this differ earnings subject conference release and like with XXXX views includes our to factors quarter things, XX, ASC certain Today’s the and Replay current to, our afcgamma.com, forward-looking among from

and uncertainties possible the or time, forward-looking on reliance to and SEC arise it for these Therefore, important events affect is that how not from predict not those these may could undue factors place these over forward-looking results and company statements. filings they differ statements. risks should We New you ask that materially you for recent with cause refer to projections. our the most to actual statements

provide financial investor an on summarize measure. Brett release the Robyn, in the will commentary; can introductory our net refer or to estate The to be today’s of earnings distributable found During our which most will in pipeline; the distributable third results this follows; and strategic will discuss origination environment; a measure income, will earnings, call is overview will discuss of available Jon, and our the call, non-GAAP remarks, format earnings, real is Len website. for presentation Reconciliations as our lending comparable GAAP financials. we

open then our Leonard Chief that, Q&A. With now call will Officer, We for Tannenbaum. turn the over the line to Executive I

Leonard Tannenbaum

third Thank and you, call. AFC Gamma's Gabe, good earnings welcome quarter to morning and

licenses estate. who us domestic those to Gamma AFC and those those is include first companies are exchanges. single that Canadian we issued and leading held, well secured the These pillars; listed We the privately cannabis operators, lender cash are for real that to flow, industry. went the are as as For joining are cannabis time, by institutional a loans three which multi-state that on typically

finance dive into we is billion to in cash differentiate experienced other our makes real John's investment Robin's transactions; credit-focused are estate expertise, AFC we in manager; to healthcare Before that billions continuing company the that investment Gamma The a an flow run like market. I'd team with and lender AFC a AFC real combines development what estate my lenders background. institutional quarterly expertise combined build with of estate asset committee's having Gamma from dollars this Gamma real having helps unique. banking run in $X expertise highlight lending, results,

led solutions. is our capabilities we III. customized out in-house construction build area by built with Over our to Bickslow further One providing continue our last to continue Martin we borrowers have the out that financing in-house quarter, expertise key

construction building we construction describe to unique further ability in our borrowers consult projects. we projects detail, in valuable, our many and will believe have financed is John and As on

analysts. executive we leadership continuing Brett's strengthened to our announced investors meet Additionally, Chief have to as pleased are last look the Gamma's and team with we him we as Officer. expertise that Brett Kaufman has and quarter, AFC us joined and Financial forward

Gamma AFC our public and of our NASDAQ equity both allows to now access cost for listed to lender private is important differentiator and This the capital A us in Turning capital industry. the debt structure. first as markets. third

by closed of BBB+ discussed are Brett benchmark XXXX, As investment have cost Securities, an capital. investment pleased grade to quarter Subsequent last notes to establish rating, grade Leveraging a our credit rating. $XXX industry-leading increase to from we end, moving quarter, which unsecured due an further we million striving detail. an in our describe will in received rating we for of offering on of in Global are our led to Seaport Egan-Jones

fact We are debt the the with support. raise further encouraged completed that by institutional we strong

equity equity fund generate diversified on utilize the operators. mix developing for lower target types assets our on debt portfolio way a continue the components a first that assets of Conceptually, among of with believe all place capital to leverage growth cost our yielding a debt-to-equity. shareholders. Going growing I good of X.X comprised more times our offering necessary of have lenders believe in this we remain these we to focused rapidly to alternative returns of against limited this to portfolio best strong industry. to forward, using scale serve our the in debt larger, the industry. is and in as we we in step, number that are With the of and this our expect Typically, business

cost business, continues the pipeline will we actionable improve to continue strong. Separately, remain aim our to As our capital. to of we continue to scale

borrowing As structuring scale the typically state operators. to to timing yields. the makes to smallest see size to to at those which midsize we between the different difficult and MSOs, the rates at have predict we top months the investments, we top In operators close, take lower closings. operators it deals previously continue lend of our discussed, nine and and three MSOs, of the single Due

quarterly turning results. our Now to

XXXX. execute X, November our fundings record During XXX.X originations. and new the million XXX third of led quarter, million of commitments to we as closed had continue to pipeline We on million on which – XX.X net of

moving quarterly have quarter deals in in in borrowers dividends active of resulted $X.XX The increase third XX pipeline per weighted earnings basic average earnings will to share the in the at quarter. $X.XX share of second a our that from our share. XX have increase per Robin drove call. operations $X.XX the later distributable This which closing cents states in during in We in XX.X% discuss

dividend As to a reminder, of if XX% end a policy pay special the of at between the our with is over necessary. year and earnings the year, XXX% dividend distributable

we but million tranche Corp’s Holdings Subsequent $XXX to of the turning funded like closed. million as a transaction a recently Jon, quarter Before notable end, new to that AFC over Verano $XX Gamma highlight of to part credit facility. call

our believe top a the and given tier over real execution the company Jon. brand expand estate that, reputation, management to turn call business a pleased experience with team. Verano are I'll is With and credit, We strong to relationship ownership,

Jonathan Kalikow

Most on construction and cultivation those and optimal that well an backup lack with borrowers. time our happy permitting required know-how zoning, we create Today, issues cannabis has. focused operators you, and we Beside Construction cultivation, a suppression, financing loans construction is Thank financing a to mitigate cannabis environment. in require team power with banks industry. We to and cannabis documents wanted and dominant them. that still all additional vital jurisdictions often building state program. real expertise experience That the an with construction to on environmental and adds strategy. This fire the that its Len. of the remains aligns a will the know production measures, Many each ensure cooling to competencies share key is needed becomes generation projects. ordinances security how we given dispensary their expertise highlight of enhanced one arise ventilation, and excess local light our in-house cannabis with our in and Lending of component lenders ordinances. be is estate. our over lighting and part other factors, in lender have to our of and our We we our releases, construction construct and industry growth of legal to lien Because believe compliance the have of draw, requisite core Information facilities are finance requiring drawn and have factors such where that as firsthand differentiating safety ability types layer infancy. and specialized shun complexity. cannabis lending of heating,

also made schedule. We that sure on the borrower on budget stay and

vested in quality have interest collateral loans. of the a Of our course, our underpinning we

let Now, me over Robyn. turn to the call

Robyn Tannenbaum

Jon. Thank you,

November November X, over X, XXXX, January of XXX have management As sourced we transactions, about billion overnight XXXX, of represents deals. as of our through for $X.X commitments. agent current XX% which XXXX AFC From acted

trusted We as lending vendor and continue platform expand to to in reputation grow. our a the industry continues our

lenders. ability the need tranche a debt cannabis lead of agent. be versus flexibility our lender, successful differentiator Jon act lender a with relationship deal syndicate is that agent addition to In with another of as AFC a provides key manager’s seeks capital manager construction its our changes AFC expertise to borrower businesses. factor to to its to Gamma’s and This to to is operators majority differentiating as and available and hold amendments execution. mentioned, borrowers largest going or a our when active external build allows financing of borrowers Gamma’s ability one completed ourselves to external ease We another that of see

sourcing existing expanded Cannabis borrowers expanding both and has incumbency we Justice sourcing initial and is In proven deals, give an of to Nature’s two platform borrowers. loans on our borrowers, continually us variety focused important upon new quarter, origination third When the Our edge. Company. loans a medicines our to with

of upon debt. turn In $XX Brett company with results. launch I about expanded our financial talk addition, Verano, the call fourth now during will we over to to our quarter, providing million the initial of another the

Brett Kaufman

participating of AFC and forward be to soon. my happy with to you earnings first very call speaking look many I'm everyone. Hello, in Gamma

finance. XX Gamma, CFO including Services of to nine Financial For those that Planning overseeing me, at organizations XX within markets capital Financial of that years global met in of not Ladenburg spent on at board Managing over I and responsibility, Director AFC roles accounting Stearns, and to served Analysis. serving various with Prior of have you coming Prior I years. experience as Director Bear for years and I Thalmann have increasing

ended $X.X of per $X.XX average basic GAAP net earnings we million of quarter income XXth, weighted or share. common the For September XXXX, had

AFC and performance million earnings income $XX.X XXXX, or to business. average income earnings the the we overall by GAAP, or income helpful losses, For the $X.XX in XXXX basic any items recorded million months non-cash XXth, also in net early period. three computed interest the unrealized Distributable is known non-cash believe $X.X represents Gamma excluding assessing loss September other per in gains providing items equity expected CECL, such losses, current of We net or CECL provision for our common was accordance distributable as adopted with share. for total compensation stockholders year. of generated distributable in its of credit fiscal weighted ended expense, as earnings or

our XXth, at reserve compared X.XX% XXth, XXXX, approximately of at loans represents the September As X.XX% to XXXX. CECL carrying approximately of June value

a distribute quarter. outstanding nine income. of $X.XX book increase of paid for $XXX.X We taxable to The XXth, its The million December was share equity the of XXst, total and As per principal for accretive XXth, the a September stockholders quarters equity REIT, XXXX. XXXX IPO the to increase distributable respectively, of of our believe third stockholders' from distributable the prior share that XXXX of On to that book each as company generally common approximately book our the primarily are follow-on months value XXXX was earnings quarter, offering of compared or $XX.XX XXXX dividend distributed XXth, compared has value in first our were December was $XX.XX of and we XX% value. our represented of our as one our Gamma of reasons share income. quarter, and At REIT attributable the XX.X% $XX.X to stock. XX% September million per in September which of XXst, our to the second as at which per end common ended AFC an required invest are annual in October least XXXX, dividends

to senior hit we closing company. X.XX% notes X.XX% of and connection per offering our we amendment of XXXX $XX as interest unsecured milestone mentioned, closed to lowers revolving from to rate credit subsequent a not on we of mature senior a institutional recently XXth, another XXst, notes rate XXXX. was public In amendment Len maturity increases a XXXX. $XX offering our the X% cash from annum December $XXX have November revolving fixed buyers. quarter-end, the This facility. our of credit second and million to to to a million date notes. qualified do the The facility and September interest private Xrd, As available commitment million, with executed The until our On revolving amount aggregate XXXX, from a extends principal

payments The paid that requires also organizations. charitable will support be of second amendment interest fees to all directly indirectly and or

For or and XXXX, the related XXXX the revolving incurred and through XXth, expense three facility nine November ended to on has credit the not months September credit Company the interest facility. revolving drawn any Xrd,

portfolio, of we XXXX. companies our quarter with of $XXX.X XXth, Portfolio $XXX.X principal to million $XXX.X assets XXth, as Turning the as million across totaled XX compared of investments total outstanding ended million, of third XXXX XXXX. spread at to September June

$XXX million third quarter, Gamma's portfolio end $XXX.X of consisted with current million of AFC of commitments funded. As the the of

and new commitments; commitments. sold funded million $XX.X a loan of closed end, new of million quarter we Following an $X and million $XX existing also additional we

Xst, we $XXX.X across current companies. outstanding November with have million million of $XXX.X of XXXX of As principal XX commitments

was yield Xst, turn loans to call All now XX% portfolio The are to back such to over life the the each will the XXth, of maturity the I September current loan and of loan, now of portfolio it approximately With of as approximately the our to Q&A. start will the we November performing. weighted XX%, that, for of of average portfolio compared XXXX, the is to weighted which as over to in Operator? maturity, measured operator yield average open questions. XXXX.

Operator

is with Cowen. Pascarelli from question Gerald Instructions] first Your [Operator

Gerald Pascarelli

Hi, Thanks for questions. the morning. good taking

the into a Labor $XX XQ, in continued starting you of of on had Verano the few end quarter, XQ clearly a million a towards So of these momentum with really announcements. lot announcement. Day with That's deal

the to Thank seasonality continue business get would when so, you you. -- just And the throughout fourth helpful. and before, this lending can the level what of duration you've expect on spoken in color there whether we quarter? Any you're update I momentum you market I in provide know an the about seeing can be of

Leonard Tannenbaum

quarter quarters, the Thanks, XX-plus The operated Gerald, market to the always -- or people question. middle years. in I've want fourth for is can to quarter. in fourth slip done before quickly. a year materializes some month in cycle, And industry XX-plus years imagine the -- There get this things sometimes that January remembering end. is is nine usually But of certainly could three strongest and into it's as the first things and I for cannabis the in quarter the

can't the the loans. and tell. that, the it's fourth quarter do before make I because quarter we fourth where of Only and have there’s plus earnings at two’s all whether we really to diligence phase the said any we deals, February, January those estimate things accomplish exactly to that are anticipate and we long to So other of point can the to is time and take phase a There's of environmental deals complete. one’s to lot difficult. quarter into be quarter, Having fourth but quality strongest things, a

Gerald Pascarelli

That it. total makes Got sense.

of which for your you have top seems anything, with outlook know you year. gross a believe credits in started is do but guided I terms like really than for at months It XXX in the originations. Verano been know I Just target, at lower the X.X, next saw prior. probably then But have Verano after a raise rate headline we Jushi that's which couple I is X.X the the rate. a would of XXX and day haven't

how environment. the about top portfolio, the And mix you the credits spreads as relative amid think you a talk can so, ideal out your yield-compressing think you building about just about loan and for

it based out, your capital the was seems thrown that your to of like cost down. capital, cost numbers you've coming also some own of on Given

in the So terms just, spread, just outlook, would be could helpful. I some guess, if that of on your you provide color

Leonard Tannenbaum

between rate, are may think transactions filled MSOs other But are yields, typically syndicated very years. velocity. Then than may seeing and rare of the repaid four-year that for that do is the headline something to we're we leveling Look, which XX% OID remember, at in held many yields I do ever -- and have a we're a XX% talking and think X.X five-year to weaker to borrowing total that IRRs hedge of and being XX% things like talk that mean years that's are think just maturity that up agency my higher XX% larger are or that three, funds in of which inclusive -- X.X IRR. is not funds and off in do it's expected, fees, maturity. I and loan loan about some almost the that always see participated yields I It's in to things to and all-in when a back about you first comment, be and that, that’s

be yields So, yields higher, the are effective usually the going than to to maturity.

able a a maintain been portfolio and deserved. but we've to, So, yield a Brett the things current they Verano at said, XX% doing despite to like maturity I think, on yield lower XX% as yield, as basically

think I do of types maturities. so, to potentially be maintain velocity. to And it We yield those we're to higher, expect additional able

As help and and operators we them of will to and year, a think grow smaller there larger acquire that to build that institutional that next mix we'd will be platform. mid-sized out support like the I MSOs

that's no magic just I next sky. a to So, XX-XX, the imagine year had projection. shot the in at but I There's

Gerald Pascarelli

Thanks much, color. helpful Len. Super very

Operator

is next with Aaron JMP from Your Hecht question Securities.

Aaron Hecht

my questions. Yes. for taking Thanks

a is thoughts a door? out immediately? that of it that credit timeframe commitments the of there door the go percentage that facility, terms Is Any out million around goes Verano $XX the commitment, draw-down? In longer-term believe you

Leonard Tannenbaum

and part-funding balance typically, sometimes periods, funded. fee funded unused which the strong of drop million. we a they have are one, on case and one-year we in we we use you're the had bit until million and in $XX all do right, $XX immediate In little for an part-commitment, longer. But the this Verano, case But all charge it's capital case, sometimes

Aaron Hecht

Roger could about pipelines? MSOs you XX-XX that. smaller thoughts possibly to MSOs any going operators? maybe And then door, talked next near-term, much large have how were smaller fourth money on thoughts the a quarter near-term mix, about goes operators. Any with next obviously If but larger and variability know some I split, and year we year, more be versus versus understand there out on

Leonard Tannenbaum

when continue year lumpy ramping the next all things a construction. license cash continue. will operators in established fourth smaller and I the operations where states operations with one, with of It's mix between diversified and think three all close, see probably they're quarter we but a diversified and the yield larger stack flows to and two, more operators

you'll fourth So, in mix see mix think the a see I a year. and next you'll quarter throughout

Aaron Hecht

fees Right. And that for we detail the in rate. great be on lastly credit to considering? may some be on amended Maybe then fees need facility undrawn other there? five that Any the

Leonard Tannenbaum

remember, I'm children of to credit taxed AFC So writing -- of on it in and don't hopefully, the giving in. to the going Foundation facility I'm taxes charity. benefit, get this states back to primarily we still all net -- We're proceeds operate I that

it's in an banks the to external we about. talking and pretty give to to that intend made we're important still all bank back communities rate equal benefit credit we going of that as facility. some external We operate So, it's think behalf of rates AFC I really on given the much be to take to the to

that expenses it points fees Typically are in other there you that. and cases. points call in basis pointed XX -- there's those some let's just basis upfront unused are waived doing are of As fees XX types and out,

-- an bits maybe. little and fee there's there's So, of agency

a certificates we're pay have believe about and or think of credit the legal about cost But extra the base their that is. talking about, to on the legal on we cost. for maybe the that cost to the it our and not. all It's the we that's of pay have to what cost and the side of bases, $XXX,XXX year all sort that cost It's side you we're cost, really borrowing talking not If shareholders borrowing that. of facility legal for

do that. to prepared now we're So,

And that We robust definitely take size because of on built-out accounting do take manage lend lot give not efficiently and I'm that maybe I'd in it still manage behalf lending see team. built-out add and have that facility backstop to there's that a going to fully the the next team, to have and not a fully platform, that year. continue a makes bank have charity we to any space. will a And and that I to think doesn't us We proceeds or can banks sense. legal probably of an we you external mean AFC. it credit

Aaron Hecht

Len. great Thanks It for the sounds idea. color, like a

Leonard Tannenbaum

problem. No

Operator

Capital. Your next Smith Lake is question with Mark Street from

Mark Smith

Hi, guys.

cannabis operating state? primarily First in big seeing some off, industry, I maybe currently what you states are the the just wanted Californias of picture, to the versus ask, that and then other of in you're kind the

Leonard Tannenbaum

I states. Thank and will cannabis underwrote Cali operators, mid-sized the which states. of payments, in We to operators this and trouble especially less are cannabis are on wrote California. maybe think I in in that plug lot LinkedIn any watch, platform, responses. going about That Watching that. any in post their to in unlimited course see their the Washington, lot Oregon you leaked that my we do small license the for a invest performing of making we $XXX in cannabis State collapse and a in see God, I've if and give for – havoc of those not the of grows, the outside loans. prices want think and have of than cause operate determined severe But not to a I'll and interest to to

we're a country a by when to be starting rebound the that of bit little to and the to any and see deal to states. across supply. pretty of come states, depth grows, product is, did of the to actually prices investments flood season, a intend basically to has we limited states. work That's and through but just of definitely down the license much But In and starting it license lot which of good Colorado in outdoor soon. a some we considering a don't very to limited do fruition the way, license under worked operate time be growing Croptober, are We California we your our happened not first California has in seeing do flood was there inventory a

Mark Smith

And landscape Perfect. but in you changes recently? competitive the are landscape then of similarly, the You have are kind today? else funds competitive about some what and that hedge the been kind involved seeing talked of here maybe in out, seeing what of you topping

Leonard Tannenbaum

I platforms Street company Oaktree, when the very Oaktree think sold – realized it of was to my The terms lending country the has I when best and Oaktree's platform learned day difficult I compete Fifth etcetera. BlackRock's, in and Rocks the or one to I lesson. world, Owl very of – in to important the what a of world,

to a scale, capital, developing cost team prongs of it's that institutionally, of our us think but capital, lender continues also institutionalized into Having should multiple leading support about size, huge to approach. the clients. best clients, in all be important I the great very grow and cost a having differentiator our incumbency as us

they and that draconian You have different that have competitors our and lenders not way. lend of They're that think approach approach. to institutionalized a still commercial have do a many can relationship

build to those think We really approach for that needs. industry in operated commercial the that's the continue those We've and are I we relationships, people. important and XX a not lending years

the and our excited prospects, ourselves scale about about our I'm and to from I'm our So, size capital, excited competitors. across continuing separate

Mark Smith

Great. Thank you.

Operator

with next is Your from Stanley Beacon. question Russell

Russell Stanley

of of are their look structure Good morning you publicly like. what my A should question. especially borrowers. course, somewhat number of reevaluating traded thank and taking them for capital necessity out Perhaps

wondering what structure think a cannabis as you lender? Just leverage healthy you company and concern for levels a what is of kind would

Leonard Tannenbaum

Including you in It's is leverage effective Beacon -- creeping are is notes below? should 'Oh, interesting. X% and writes headline -- liabilities so all sale leverage level cannabis that all of get at you be a lot companies escalators time, you the because leverage the of contingent the leverage all the bottom think are leasebacks are or and making get, in levels them not asking institutional It Are I are report that simple. guarantees that and leverage our at?' and including investors are the seller When many investors what are which that's MSOs in that the you they and leverage an acquisitions about different our so question in operators, in it look When work to including diligence that not about up know simple from public leverage that IFRS. to cannabis not? takes of to amount enormous these line. cannabis certainly So and you on really at including

to have GAAP the You do conversion.

real leverage leverage. -- of ask we determined when a You have is to what's this what's and headline not below the We all do what line above the analysis line.

Just it's it's money, but say, like like not. it X.X% sounds coupon, I X.X% an

What's estate look do you to of very have in expensive at haven't What operators And lend How of one you've say And large equipment your real least anything? factored it? you and so cleaner their own and where if And does GAAP you What more really obviously, this in even partner Verano space the conversion? leasebacks. in and expensive leases future, they all we seen sale asked important of very that Verano they have, the with. any? the real like? estate is questions. succumb and What us those a when very who we is we own to all check do write

Act really etcetera, yield passes, So, compression. to we benefit want that from target to those want companies types of SAFE

Russell Stanley

around value Robin's I the Got just if it. more great And That's could, of call. color. on around incumbency just question one earlier the comments

of wondering, Just MSOs you're financings we've the given announced Thank new the forward, seeing of debt in relationships coming seen late? larger especially what you. by terms

Leonard Tannenbaum

Brono have and very take I Medicine, we over. to others time. powerful in as support the believe the and a hard believe into everything. say long incumbency you that's lending if model, you to your Nature's to really build like we it's continue be to partners understands how I think We're I Grown, a good and very with that have new think they're lender model And as is well it's where not that for what we Justice think, companies that the give proud really great working over doing business business relationship and and go good of that you commercial and to

about have just commercial your be You to approach.

you happen that seeing that that those we be to build over year. as lenders to the think to next companies other I relationship to continue continue guys we'll and and forward look we

Russell Stanley

the for color. Thanks Excellent.

Operator

question is with Jefferies. Final Lance from Jessurun

Lance Jessurun

Thank question. quick I you you debt next on view see equity taking quarters? Two of chat course really how for leverage and and over of the where the ones. to you going optimal balance your the wanted of my kind

Leonard Tannenbaum

I clarify of for our to we think target that we this It's cost It's see watch Right? thank made comment. a question times week the year little stair-step leverage, asking because debt after how We're and I that a I next -- capital. a we already to did have did trading you mean to end is bit. said by debt to going I trades. approach. issuance. X.X Now well ago that wanted the I that when

at is, X.X issuance we end with to get are my times around the have monitoring continuing we're about that. of also trades a next million a $XXX And look ratio. the to target tranche to a our institutions that times balance equity X.X at to taking now we debt talk debt-to-equity So that year Eventually interest, a Seaport.

Lance Jessurun

you. question the thank the just have is And then Okay, around competitive space. I last

the on Your SAFE Act the well? competitors are Anything up. coming or side regulatory as

Leonard Tannenbaum

public in of for expertise I've yet expertise portfolio-manage estate, really lending years try of credits. businesses that there record to that I real the the had them institutional XXX having credits, track none to type of get those estate Look, as people. of matching John I have enter with over and manager, that built view asset middle-market not competitors of done that I I John have real XX XXX anyone are billions a in true There's or dollars space, competitors continue and but through built. has assets. and/or I billion into that $X scaled number think a as large built

a an an if that going to competitor fortress come our Owl be into Rock, decide space to look, our Apollo, So, us. or or to is Oaktree significant right

sure, the first. quickly changing of takes I think, in XX, our data, data. types terms terms the the really for by four none in construction of We in and of in legislative much we're XX, differentiate long orders those understand believe and how to next states what we're competitors cannabis really changes, mining year the in data the do focused XX experience the and on, to over and dynamics industry the have center have very that builds can that so we in enough I expertise years, of orders three of even but you in the understanding delays and last

We factors have as different really so behind ones are. differentiating far I we where other many that the view

we're that, not We're dominant The talking talking other not has the leaseback. the about that lenders sale leasebacks. environment, is. IIPR about in sale Obviously lending position a

Lance Jessurun

Thank it. Got you.

Operator

time, question no a do I -- back to there we [indiscernible] questions. this over okay, from the At have would call to with are return like BTIG.

Unidentified Analyst

the Are bit on to top-tier, good lent you You two there X are Can John. other top-tier morning, dropping helpful? that Robin, those mentioned well? that question on borrowers Len, for seeing earlier that as maybe a that the color to would you Would the of the and Hey, Tier to you potential for a little more relative leveling rates off MSOs. you yields? back just see go and we be say

Leonard Tannenbaum

right why gotten the space the Seaport or effort Look Canaccord it was the started very the manner they packaging from they good hedge rates driving in that and the a doing syndicated better job Canaccord And attracting felt like answer, view correctly. was funds pricing and very leading MSOs into credit that seen clearance leading. do of -- But because and no of have is, good that the lot a my of view my down. Seaport and you've right? had there's funds a Primary,

if same deal, as originated would would be deal which the the or charge we OID get remember, a cost borrower. that and the they let to Now fee, we the it fee

million going important they're check positioning Canaccord that the want versus of to with have our this we'll they're as our over with Canaccord great write to million $XXX parts to will that their it and rest parts market. waivers -- able them I job to company. the doing a be of and necessarily that and disparate will doesn't be competitive do $XXX are agent a Seaport have and lead think and continue and very check base important capture want million holder us control lead to relationship a us a and maybe the also, Seaport the and job look, if or fee. us a deal positioning things yes, you like you is, some versus build deal check of this syndicating But it's great But and market. deal, very you $XXX maintenance the

a job. place look, so think with larger developing I a And everything, but and did good pretty for there's competitive Seaport environment Canaccord more a credits.

Unidentified Analyst

landscape interesting. And and the how each borrowers for sale the you competitive demand from then loans mature on evolve, as Very industry leaseback it. of would the secured then, generally? Got Len, to of financing tears versus continues characterize the the

Leonard Tannenbaum

sale have to is firms going be a that. lot the mean, Both expectation leasebacks capital need certainly leaseback different been borrowers. reasons, route that that demand sale them with leaseback for demand there's continue firms has fact they've a there parts sale we'll their I for the of in hooks that the So, my of be like market including going gone IIPR variety go companies, down of when down good partners the to been route, lending. and to company a of for to and a they if serve there have the that and a those is

to yield And against your five versus to to so, have it, much your estate we the you a real an important want them Not But years, leasebacks. to to I that, medium-term do can done capital both leasebacks think every to Someone to and for one newer to of companies own next expect that continue because be over effective haven't of the over do about to market. potentially really afford sale environment do that expect compressing borrow sale component the in going better. be sale leasebacks expect firm right? do cost I now and is

Unidentified Analyst

thanks That very much.

Leonard Tannenbaum

Thanks everyone.

Operator

remarks. I for would now like to to turn closing the over conference management back

Leonard Tannenbaum

reporting Thank you all We year-end next year. results to listening. for forward our look

Operator

today’s This call. concludes conference

You may now disconnect.

AFC Gamma (AFCG) 6 Nov 212021 Q3 Earnings call transcript