Peter Sack: Rescheduling Could Spark M&A and Lending Growth

On the latest Trade To Black Podcast, host Shadd Dales and co-host Anthony Varrell connect with Peter Sack, Managing Director of Chicago Atlantic (NASDAQ: REFI, LIEN) to break down the company’s Q2 2025 results and what’s ahead for cannabis lending. We also dig into how cannabis rescheduling rumors could impact the lending market. An announcement from Washington could create a wave of new deal activity for Chicago Atlantic, while also fast-tracking mergers and acquisitions across the cannabis sector.

Chicago Atlantic posted $7.7 million in net investment income, or $0.34 per share, matching its quarterly dividend. The company holds $125 million in cash, with all 33 borrowers current—an impressive feat given challenging industry conditions. He attributed this stability to Chicago Atlantic’s investment strategy, which emphasizes low leverage, lending against existing cash flows, and diversifying across multiple markets.

Regarding federal cannabis rescheduling, the biggest potential benefit would be a surge in market activity, says Sack. These would spark acquisitions, refinancings, and expansions that would create more lending opportunities. Both the company’s business development corporation (BDC) and REIT sides stand to benefit.

In state markets, Sack was optimistic about New York, where Chicago Atlantic has financed multiple operators and social equity initiatives. Progress is happening in opening dispensaries, improving product quality, and offering competitive pricing to challenge the illicit market. New York could surpass Florida in market size in the coming years.

Tune in for discussions on the pipeline for new investments, which is one of the largest in the company’s history—fueled by restructuring financings, employee stock ownership plan (ESOP) transactions, and consolidation in mature markets like California, Oregon, and Washington. rescheduling nullifies 280E.

Looking ahead, Sack said the firm’s floating rate loans include rate floors to protect against declining interest rates. He sees ongoing restructuring and consolidation as healthy for the industry, creating stronger borrowers and more financing opportunities.

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