![]() They also generally attach more conditions to their investments, including taking ownership of the assets should the company continue to struggle (or, worse yet, after the company finds success). These investors are “wheeler-dealer” types, she says, and take on more risk in exchange for a much larger stake in the company (in equity deals) or massive interest rates (in debt deals). Vulture investment funds-investors that target “distressed assets” (companies that are near/at insolvency)-have been taking more interest in the cannabis industry, according to Hilary Bricken, attorney at Harris Bricken. Now, experts say these market conditions might exacerbate a phenomenon that was already taking off in the cannabis industry prior to the coronavirus outbreak: vulture investing. GDP is expected to take an even bigger hit in the second quarter, as the Congressional Budget Office (CBO) projects the country’s economy will shrink another 35% by the end of June. gross domestic product (GDP) by 4.8% in the first quarter of 2020. The global COVID-19 pandemic and the ensuing stay-at-home orders have forced businesses to shutdown or drastically change their operations, distorted companies’ top and bottom lines, and shrunk the U.S. A reference to an equity fund that targets distressed assets has been removed. Editor's note: This article was updated on at 1:50 p.m.
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