Marijuana lender AFC Gamma splitting into two companies

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Marijuana-sector real estate lender AFC Gamma is splitting off its non-cannabis commercial real estate business into a separate company.

The new publicly traded company, which will be called Sunrise Realty Trust, intends to operate as a real estate investment trust (REIT), West Palm Beach, Florida-based AFC Gamma said in a late Thursday news release.

According to a company statement, the spinoff “will result in two pure-play debt capital providers – one focused solely on the cannabis industry and a second on (commercial real estate) in the southern United States.

“AFC Gamma believes that the separation will allow both companies to focus on their respective portfolios, articulate their own clear investment thesis, and have the flexibility to tailor their business strategies to best capture market opportunities within their specialization.”

The spinoff is anticipated for the middle of this year.

After the separation, AFC Gamma said its cannabis portfolio would hold 12 funded loans at 21% yield to maturity, with assets worth roughly $330 million, per its balance sheet as of Sept. 30.

Sunrise would have two funded loans with assets of about $115 million.

Shares of AFC Gamma trade as AFCG on the Nasdaq exchange.