Our Process

At The Kinfolk Group, we follow a meticulous and conservative approach to capital deployment, utilizing various capital allocation strategies to provide comprehensive enterprise support.

Our due diligence process considers options such as senior secured financing, structured finance, and equity partnership opportunities. We prioritize partnering with companies that possess a strong balance sheet, a history of cash flow generation, and a track record of consistent growth. Our thorough analysis includes evaluating credit risk relative to industry peers and identifying companies with a sustainable competitive advantage.

  • For senior secured and structured financing opportunities, we focus on the following criteria:

  • 1. Strong Balance Sheet and Cash Flow

    We seek partners with a robust balance sheet and a proven history of generating cash flow.

  • 2. Consistent Earnings Growth

    We evaluate a track record of consistent revenue and earnings growth as an indicator of financial stability and performance.

  • 3. Adequate Collateral Coverage

    We assess the collateral value to ensure it adequately covers the secured principal and interest.

  • 4. Short-Term Financing Maturity

    Our financial solutions typically have a maturity period of 12-24 months, offering flexibility and minimizing long-term risk exposure.

  • 5. Sustainable Competitive Advantage:

    We prioritize companies with a sustainable competitive advantage that can drive long-term success.

We consider the potential synergies thereby creating opportunities for enhanced value creation.

  • 1. Strong Management Team

    We seek partners with a strong management team possessing industry experience and expertise.

  • 2. Attractive Valuation

    We evaluate the valuation of potential partnerships relative to peers and industry trends.

  • 3. Historical and Potential Growth

    We analyze historical revenue growth and assess the potential for future growth in the target market.

  • 4. Sustainable Competitive Advantage

    We prioritize companies that demonstrate a sustainable competitive advantage, positioning them for long-term success.

  • 5. Synergy Potential

    We consider the potential synergies thereby creating opportunities for enhanced value creation.

Examples of prospective financial partners

  • The prospective partner is a single-state operator in Oregon, using cultivation and processing real estate as collateral for the anticipated loan. Our investment committee conducts a detailed analysis of the borrower's financial statements, assessing revenue, operating expenses, and debt service coverage ratio. We also evaluate the quality and value of the real estate collateral.

  • The prospective partner is a multi-state operator with cannabis operations in Massachusetts, Ohio, and West Virginia. The borrower presents retail and cultivation real estate assets as collateral for the anticipated loan. Our investment committee conducts a comprehensive review of the borrower's financial statements, including gross margin, EBITDA, and debt to equity ratio. We also analyze the quality and value of the real estate collateral.

  • The prospective borrower is a vertically integrated single-state operator in Illinois, presenting cultivation real estate as collateral for the anticipated loan. Our investment committee conducts a detailed analysis of the borrower's financial statements, including cash flow projections, debt service coverage ratio, and operating expenses. We assess the quality and value of the real estate collateral.

  • The prospective borrower is a single-state operator in Ohio, using retail and cultivation real estate assets as collateral for the anticipated loan. Our investment committee conducts a comprehensive review of the borrower's financial statements, evaluating profitability, liquidity, and leverage. We also ensure the quality and value of the real estate collateral.

  • The prospective borrower is a single-state operator in Maryland, utilizing cultivation real estate as collateral for the anticipated loan. Our investment committee conducts a thorough analysis of the borrower's financial statements, assessing key performance metrics such as revenue growth, EBITDA margin, and debt service coverage ratio. We also evaluate the quality and value of the real estate collateral, ensuring its free from any environmental or legal liabilities.

At The Kinfolk Group, our rigorous and detailed capital allocation process allows us to make informed decisions and select partners that align with our commitment to long-term value creation. Contact us today to learn more about our process and how we can assist your cannabis business in achieving its goals.