Brazilian cannabis investment fund raises R$ 3 million on the first day

Marcus Bruno

Announced last Tuesday (29), the first Brazilian investment fund in cannabis companies raised R$ 3 million on its first day, totaling more than 220 investors. The goal, according to George Wachsmann, head of management at Vitreo fintech that launched and manages the Cannabidiol Fund, is to reach R$ 100 million.

In an interview with the Sechat portal, Wachsmann stated that there is no set deadline to reach this figure. However, when the amount is reached, Vitreo will conduct a "technical pause." According to the businessman, the market's reception of the investment in the cannabis sector was “better than we imagined.”

According to Vitreo, this fund represents the simplest way to invest, all at once, in several companies in the cannabis sector through shares traded on the stock exchanges in the USA and Canada. Starting from R$ 5,000, and without needing to open an account in North America, the investor will have access to a portfolio of shares from companies that explore legal cannabis.

However, due to regulatory issues, this fund is exclusively intended for qualified investors – those with more than R$1 million in financial investments - or who have certifications approved by the CVM such as CEA, CGA, CFP.

Wachsmann is also monitoring the evolution of the market and regulation in Brazil. However, he understands that it is still too early to plan a national fund: "we do not have a local fund in our plans."

How has the market reception been after the announcement of the cannabis fund, and what was the fundraising on this first day?
The reception has been very good, even above what we imagined. Yesterday, the first day of the fund on Vitreo's shelf, we raised R$ 3 million.

How long do you expect to reach the goal of R$ 100 million and how will you get to this figure?
We do not have a pre-established goal for the product. But we intend to conduct a technical pause when we reach R$ 100 million.

Why such a high restriction, limited to investors with more than R$ 1 million in investments?
This is a regulatory restriction from the CVM (Securities and Exchange Commission), not from Vitreo. Since the fund invests 100% of its portfolio abroad, the regulator establishes that only qualified investors can invest. In defining this rule, only those who have at least R$ 1 million in financial investments, or who have any of the certifications accepted by regulation, are considered qualified investors. This is something that could change over time as the Brazilian investment market matures.

Financial investments in cannabis have proven to be quite volatile in Canada. How do you convince investors to bet on this market?
We believe there is excellent room for appreciation for investors who do not have a short investment horizon. This is an industry with high growth potential, which usually translates into good investment opportunities. It is a risky investment, and its participation in the asset composition needs to align with each investor's risk profile.

The regulation of cannabis in Brazil is getting closer. With that, how do you assess the possibility and viability of a fund for Brazilian companies?
We view it positively and believe that here in Brazil we will also see positive evolution regarding this industry, especially concerning medicinal use. But we understand that it is still too early for that, and therefore, we do not have a local fund in our plans.

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