Midian - PPM pitchdeck

Ponder
the path of
your feet, And let
all your ways be established

d.

Colorado Hig

1) Offering
2) Private Placement
3) Subscription Agre
4) Limited Partnersh

gh Yield Fund

t Memorandum
eement
hip Agreement

Offe

ering

Table of C

1) Abo

Contents

out Colorado High Yield Fund
2) The Opportunity
3) Target Markets

4) Fund Management
5) Fund Overview

6) Financial Overview
7) Disclaimer

About Colorado H

Colorado High Yield Fund, LP (“CHYF”) is a
that invests in financing instruments wi
recreational marijuana industry as well a
market. Operations are conducted within
allowing this activity.

CHYF is primarily an investor in funds, v
cannabis and hemp industries. CHYF wil
interest returns on financing provided to
the purchases of earning assets which in
receivables, credit and debit accounts, sto
(collectively, the “Earning Assets”). We wil
Assets at a discount based upon term of th
seller, and credit quality. Primarily, CHY
companies that cannot obtain funding f
need secondary financing in the cannabis

High Yield Fund

a Fifty Million Dollar ($50,000,000) fund
ith financial entities in the medical and
as the related industrial hemp commodity
n state jurisdictions that have passed laws

ventures, and financial instruments in the
ll endeavor to produce distributions from

dispensaries and cultivation facilities by
nclude, but are not limited to, accounts
ocks, bonds, and other debt instruments
ll purchase receivables and other Earning
he obligation, interest rate, industry of the
YF seeks unique opportunities to finance
from traditional lending sources and/or
and/or hemp industry.

About Colorado

The Fund will seek to accrue and pay
(“Hurdle Rate”) to investors. This Hurd
returns to investors prior to the deploym
CHYF will buy loans from a third part
third party lender sells the loans at a 2
spread for servicing and maintenance .

CHYF also finances banking support, cr
systems to address operations and gover
through investments in companies that p

High Yield Fund

yout no less than a net 15% dividend
dle Rate will be paid from the initial
ment of any additional funding activities.
ty lender who originates the loans. The
25% yield to CHYF, maintaining a 10%

redit card processes, and administrative
rnment compliance within the industry,
provide value-added services.

The Opp

Legal US pot sales soar to $5.4B in 201

"You won't find another industry growing

Legal pot sales soared to $5.4 billion for 2015, up 17.4 percen
In 2014, according to the ArcView Group which tracks the c
figures include medical and adult consumer sales. However, t
largely fueled by the explosive growth in consumer sales, as s
approved adult recreational marijuana use. Adult use sales gr
from $351 million in 2014 and will grow by an astonishing 2
$6.7 billion in total U.S. sales..

ArcView Market Research released its fourth edition of The S
report, it included the prediction that the legal cannabis mark
by 2020. ArcView expects the legal pot market to show a com
few years. The numbers are astounding, considered the first r
only two years ago.

Why the market is growing

While the drug remains absolutely illegal on the federal level
legal marijuana for years, according to national polls. A hand
the latest to allow the sale of recreational pot following expec
states have legalized recreational pot, and a total of 23 states
have legalized medical marijuana.

portunity

15:

at that kind of clip": ArcView Group CEO

nt from $4.6 billion
cannabis markets. The
the annual gain was
some states have
rew to $998 million
25% this year to reach

State of Legal Marijuana Markets
ket will see a whopping $21.8 billion in total annual sales
mpound annual growth rate of nearly 30% over the next
recreational dispensaries opened for business in Colorado

l, the tide of public opinion has been moving in favor of
dful of states could become
cted votes in November. Four
and the District of Columbia

The Opp

Well-established medical pot markets in states like Californ
sales, but recreational marijuana sales are expected to help f
years, says ArcView. It projects that adult-use pot sales will
2020. That would represent growth of more than 1,150% for

The huge jump in adult-use sales last year coincides w
Washington, which launched its legal recreational market in
last fall. Meanwhile, 2015 recreational sales in Colorado had
11 months.

More states expected to legalize recreational marijuan

The biggest driver of growth in coming years is sure to be ne
legalize pot to a vote this fall. California’s medical sales alr
legalizes recreational marijuana this November, as many exp

portunity
nia still account for much of the country’s legal marijuana
fuel the cannabis market’s soaring growth over the next few
account for more than half (53%) of the overall market by
r recreational sales over the next four years.

with the first full year of recreational marijuana sales in
n July 2014 as well as the beginning of legal sales in Oregon
d already increased by almost 68% year-over-year after only

na

ew laws being passed by states. Half a dozen states will put a
ready account for a large chunk of the total industry; if it

pect, that alone could lead to a huge boom in industry sales.

Target M

While the legal marijuana market continues to expand natio
region of the United States. Of the states that have legalized
largest legal cannabis market in the U.S., at $1.3 billion, whic
use legalization later this year. Arizona was found to have the
expanding to $155 million, up more than $120 million from t

Five states have marijuana markets that are estimated to be
first states to open retail marijuana shops in the U.S., consum
products in 2014. According to the Colorado Department of
marijuana sales, up from $669 million in 2014. Colorado also
Oregon and Alaska are expected to add an estimated combin
of operation.

With the Western Region of the United States having 4 of th
sales; it stands to reason that maintaining our focus of marke
beneficial.

Markets

onwide, the largest market share remains in the western
d medical or recreational marijuana, California still has the
ch is expected to grow exponentially , pending recreational
e fastest-growing major marijuana market in 2014,
the previous year.
e larger than $100 million. In Colorado and Washington, the
mers purchased approximately $370 million in marijuana
f Revenue, in 2015 Colorado achieved $996,184,788 in
o had $135,000,000 in marijuana taxes paid in 2015.
ned $275 million in retail marijuana sales in their first year

he 5 states with the greatest market share in marijuana
ket share t absorption to this region will prove most

Fund Man

Investor Relations Focus

The Colorado High Yield Fund has
reporting. Investors are given sec
High Yield Fund web site. Th
quarterly financial reports, Fund up

nagement

s created a portal for on-demand
cure access through the Colorado
he reporting portal will provide
pdates and year end tax reports.

Fund Man

Administrative Expertise

• Back office Expertise ensuri
• Capital Account manageme

• Quarterly reporting directly

• Outside legal counsel for
compliance

nagement

ing SEC compliance
ent
y to investor portal

federal and state regulatory

Fund Man

A diverse team of industry

The Colorado High Yield fund executive team b
ensuring a well-rounded perspective for all of
leadership to share a common vision and value
commitment to providing the best possible serv

TAB TURNER, MEMBER

Mr. Turner is the leading consumer adv
for his broad reaching contribution in r
pertaining to the Ford Explorer rollovers
win over Ford and Firestone was the foc
story and the 2003 book, Tragic Indiffer
successfully sued Arab Bank for financin
and the PBS program, Frontline. Corpora
2015. In 2001, he was named “Trial La
national citizen rights organization supp
network includes friends and associates
sports, and Hollywood. James Brolin wi
picture, Tragic Indifference, based upon
an experienced management team to co
companies, adding value to shareholder

nagement

y leaders

brings a diverse set of skills and experience,
its operations. Varied backgrounds allow our
es; they possess a passion for innovation and a
vice to our clients.

vocate litigation attorney in the United States. He is known
revealing Ford’s and Firestone’s reckless design decisions
s, as well as other automotive safety issues. His landmark
cus of the December 2000 New York Times Magazine cover
rence. In one of his most recent milestone cases, Turner
ng terrorist activities . He has been featured on 60 Minutes
ate Live Wire named his firm best litigation law firm in
awyer of the Year” by Trial Lawyers for Public Justice, a
ported by the best trial lawyers in America. Mr. Turner’s
s at the highest levels in Washington D.C., professional
ill play the role of Tab Turner in the upcoming motion
n the 2003 book. Mr. Turner’s demand for excellence drives
onstantly improve the basic earning power of our

rs.

Fund Man

CHRIS BOYD, MEMBER

M. r. Boyd comes to us as an individu
in the direct and indirect banking an
industries over his past 22 years of e
variety of skills including data analy
and auditing, human resources man
marketing, sales and customer servi
and reporting will provide the Fund
leadership in analytics and reportin
integrity.

DANIEL ALCORN, MANA

Mr. Alcorn offers 28 years of financ
knowledge in the industry is broad
Mr. Alcorn has been the Managing
entities. He successfully developed
ecommerce clients. As a Senior Vic
credit card services nationwide , res
in the United States. He also succes
achieved market share leadership. M
through quality improvement meas

nagement

ual grounded in financial stabilization. He has been involved
nd finance industries, as well as legal and educational
employment. His responsibilities have encompassed a wide
ysis, forecasting, budget management, accounting, oversight
nagement, project management, research and analysis,
ice. Mr. Boyd’s vast experience in data collection, analysis
d with plausible trends of the ensuing markets. His
ng for the Fund will be clear and concise and of the highest

AGER

cial management experience to the management team, his
spectrum and tailor made for his position with the Fund.
Director and Partner in both funding and payment solution
Automated Clearing House (ACH) and eCheck systems for
ce President in Banking, Mr. Alcorn expanded merchant
sulting in recognition amongst the largest acquiring banks
ssfully launched a Home Equity Credit Line program, which
Mr. Alcorn’s desire to increase growth and profitability
sures further insures the success of the fund.

Fund Man

LARRY KIMBALL, MANAG

Mr. Kimball brings with him a broad b
management. His C-class experience
operation is paramount. As their Chie
responsible for the management of all
management skills for agriculture ope
resort hotels, to running one of the lar
private equity experience includes act
fund, focused on Internet technology c
finance, Mr. Kimball is a great asset to

JOHN HILL, MANAGER

Mr. Hill has been engaged in consume
expertise, he is able to provide immed
management, Mr. Hill has established
funding programs and compliance gu
establishing a sub-prime company for
along with his proven ability to map o
makes Mr. Hill a proven asset to the Fu

nagement

GER

background encompassing over 30 years in financial
e in a public traded company, Dole Food Company’s Lanai
ef Financial Officer and Chief Operating Officer, he was
l Lanai subsidiaries. This position required diverse
erations, development of luxury residences, management of
rgest cattle operations in the United States. Mr. Kimball’s
ting as Investment Manager for a family office private equity
companies. With his prowess and proven experience in
o the Fund.

er finance and factoring for over eighteen years. With this
diate solutions to our clients. In regards to operations and
d this skillset with a number of his own companies, creating
uides to help secure successful growth. His experience
r the purpose of purchasing retail installment contracts,
out and create success in the finance and factoring industry
und.

Fund Ov

THE FUND

TARGET FUND SIZE
MINIMUM INVESTMENT
TARGET NET RETURNS TO INVESTORS
GENERAL PARTNER

GENERAL PARTNER INVESTMENT
FUND TERM

INVESTMENT PERIOD
CURRENCY
REPORTING

verview

Colorado High Yield Fund I, LP,
a Delaware limited liability company
$50 Million
$100,000
15%
Colorado High Yield Fund, LLC,
a Delaware limited liability company
$1,000,000

Five years with up to two additional
one year extensions
The Term of the Fund
US Dollar
Quarterly

Fund Ov

FUND MANAGEMENT FEE Fees
paid
DISTRIBUTIONS;
CARRIED INTEREST (a) 1
c

(b) 1

Ava
and
in th

(1) 1

(2) 8
G

verview

s will be earned by the General Partner and
d on a quarterly basis as follows:

1.75% per annum of the aggregate capital
commitments of the Partners; and
1.0% per acquisition or disposition.

ailable cash flow, after the Fund expenses
d reserves, may be distributed quarterly
he following order:

100% to the Investors pro-rata until the
Investors have received a return of
their total capital contributions;

80% to the Investors and 20% to the
General Partner

Financial O

Limited Partnership Pro-Forma Sta
Total Limited Partner Subscriptions $

Gross Revenue (25% Yield on Subscriptions) $
General Partner Mgmt. Fee (1.75% of Revenue)
Blu Rock Servicing Fee (5.0% of Revenue)
Loss Reserve (0.96% of Revenue)
Professional Fees
Distributable Cash
Limited Partner Distributions
Limited Partnership Cash Balance

Overview

abilized Year
$50,000,000

$12,500,000 Assets Purchased @ 25% Yield
$875,000 Purchase Orders $10,000,000

$2,500,000 Factored Receivables $35,000,000
$480,000 Loans and Leases $5,000,000
$41,000 Totals $50,000,000

$8,604,000 15% Yield on Subscriptions
$7,500,000
$1,104,000 Available for Reserves

Disclaimer

This offering has been prepared solely for the purpose of assisting inter
independent, in-depth investigation and analysis of Colorado High Yiel
may be required to evaluate the company. In all cases, interested parties
analysis of the company and the information set forth in this offering as
such parties.

Neither the company nor any of their respective affiliates or representa
to the accuracy or completeness of the information contained in this off
made available to any interested party, and none of the company and an
expressly disclaim, any and all liability for, or based in whole or in part
(including without limitation any expressed or implied representations
representations and warranties that may be made by the company to an
is executed, and subject to such limitations and restrictions as may be sp

This offering includes, and other written or oral communications may c
estimates, and projections provided by the company with respect to the
within which it operates (“Forward-Looking Statements”). Such Forwa
provisions of the Private Securities Litigation Reform Act of 1995. These
(including without limitation risks and uncertainties associated with ge
competition, and pricing) and are subject to change at any time. No assu
those contained in such Forward-Looking Statements and the Forward-
events. Such Forward-Looking Statements reflect various assumptions b
which assumptions may or may not prove to be correct. No representat
Forward-Looking Statements. None of the company or any of their resp
provide additional information or to correct or update the Forward-Loo
Only those particular representations and warranties that may be made
agreement, when, as, and if it is executed, shall have any legal effect.

By accepting this offering, the recipient acknowledges and agrees that a
agreement and the recipient shall not release, disclose, or duplicate by a
information related to the company and provided to the recipient shall
reproduced, or distributed to others without the prior written consent o

The company reserves the right to negotiate with one or more intereste
prior notice to the recipient or other interested parties. Neither this offe
sell or the solicitation of an offer to buy any assets or equity interest of t
has been no change in the affairs of the company since the date hereof.

rested parties in deciding whether to proceed with their own
ld Fund and does not purport to contain all of the information that
s must conduct their own independent, in-depth investigation and
s well as any other information communicated or made available to

atives make any representation or warranty (expressed or implied) as
fering or any other written or oral communication transmitted or
ny of their respective affiliates or representatives shall have, and they
t on, such information or other written or oral communication
s), errors therein, or omissions therefrom. Only those particular
n interested party in a definitive written agreement, when, as, and if it
pecified in such definitive agreement, shall have legal effect.

contain, or may have contained, certain statements, approximations,
e anticipated future performance of the company and the industry
ard-Looking Statements are made pursuant to the safe-harbor
e Forward-Looking Statements involve risks and uncertainties
eneral economic and business conditions, general market conditions,
urances can be given that actual results will not differ materially from
-Looking Statements should not be relied upon as predictions of future
by the company concerning anticipated results and occurrences,
tions or warranties are made as to the accuracy or realization of such
pective affiliates or representatives undertakes any obligation to
oking Statement or any of the information set forth in this offering.
e by the company to an interested party in a definitive written

all of the information contained herein is subject to a confidentiality
any means the information herein. This offering and any other
remain the property of the company and may not be copied,
of the company.

ed parties at any time and to enter into a definitive agreement without
ering nor its delivery to any interested party shall constitute an offer to
the company, nor shall this offering be construed to indicate that there
.

Priv
Place
Memor

vate
ement
randum

Do Not Copy Without Written Permission from Colorado High Yield Fund, LP

COLORADO HIGH YIELD FUND, LP
A CAPITAL FUND

$50,000,000
IN LIMITED PARTNER INTERESTS

CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
_________, 2016

Copy #:
Issued to:
This document is confidential and should
not be distributed outside the person or
organization to which it is issued.

Colorado High Yield Fund, LP Confidential & Trade Secret

NOTICE TO INVESTORS

THIS CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM (THE “MEMORANDUM”) HAS BEEN
PREPARED SOLELY FOR USE BY THE PROSPECTIVE INVESTORS OF COLORADO HIGH YIELD
FUND, LP, A DELAWARE LIMITED PARTNERSHIP (THE “FUND”) AND SHALL BE MAINTAINED IN
STRICT CONFIDENCE. EACH RECIPIENT HEREOF ACKNOWLEDGES AND AGREES THAT (I) THE
CONTENTS OF THIS MEMORANDUM CONSTITUTE PROPRIETARY AND CONFIDENTIAL
INFORMATION, (II) COLORADO HIGH YIELD FUND, LLC, A DELAWARE LIMITED LIABILITY
COMPANY (THE “GENERAL PARTNER”) AND THEIR AFFILIATES, INCLUDING WITHOUT
LIMITATION THE FUND (TOGETHER, THE “FIRM”) DERIVE INDEPENDENT ECONOMIC VALUE
FROM SUCH CONFIDENTIAL INFORMATION NOT BEING GENERALLY KNOWN, AND (III) SUCH
CONFIDENTIAL INFORMATION IS THE SUBJECT OF REASONABLE EFFORTS TO MAINTAIN ITS
SECRECY. THE RECIPIENT FURTHER AGREES THAT THE CONTENTS OF THIS MEMORANDUM
ARE A TRADE SECRET, THE DISCLOSURE OF WHICH IS LIKELY TO CAUSE SUBSTANTIAL AND
IRREPARABLE COMPETITIVE HARM TO THE FIRM. ANY REPRODUCTION OR DISTRIBUTION OF
THIS MEMORANDUM, IN WHOLE OR IN PART, OR THE DISCLOSURE OF ITS CONTENTS, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE GENERAL PARTNER, IS PROHIBITED. EACH PERSON
WHO HAS RECEIVED THIS MEMORANDUM IS DEEMED TO AGREE TO RETURN THIS
MEMORANDUM TO THE GENERAL PARTNER UPON REQUEST. THE EXISTENCE AND NATURE OF
ALL CONVERSATIONS REGARDING THE FUND AND THIS OFFERING MUST BE KEPT
CONFIDENTIAL.

THIS MEMORANDUM HAS BEEN PREPARED IN CONNECTION WITH A PRIVATE OFFERING TO
ACCREDITED INVESTORS OF LIMITED PARTNER INTERESTS IN THE FUND (THE “INTERESTS”).
EACH INVESTOR WILL BE REQUIRED TO EXECUTE A LIMITED PARTNERSHIP AGREEMENT (AS
AMENDED, RESTATED AND/OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “PARTNERSHIP
AGREEMENT”) AND SUBSCRIPTION AGREEMENT AND INVESTOR QUESTIONNAIRE (THE
“SUBSCRIPTION AGREEMENT”) TO EFFECT ITS INVESTMENT IN THE FUND. THIS MEMORANDUM
CONTAINS A SUMMARY OF THE PARTNERSHIP AGREEMENT, THE SUBSCRIPTION AGREEMENT
AND CERTAIN OTHER DOCUMENTS REFERRED TO HEREIN. HOWEVER, THE SUMMARIES IN
THIS MEMORANDUM DO NOT PURPORT TO BE COMPLETE AND ARE SUBJECT TO AND
QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE ACTUAL TEXT OF THE RELEVANT
DOCUMENT, COPIES OF WHICH WILL BE PROVIDED TO EACH PROSPECTIVE INVESTOR UPON
REQUEST. EACH PROSPECTIVE INVESTOR SHOULD REVIEW THE PARTNERSHIP AGREEMENT,
THE SUBSCRIPTION AGREEMENT AND SUCH OTHER DOCUMENTS FOR COMPLETE
INFORMATION CONCERNING THE RIGHTS, PRIVILEGES AND OBLIGATIONS OF INVESTORS IN
THE FUND. IF ANY OF THE TERMS, CONDITIONS OR OTHER PROVISIONS OF THE PARTNERSHIP
AGREEMENT, THE SUBSCRIPTION AGREEMENT OR SUCH OTHER DOCUMENTS ARE
INCONSISTENT WITH OR CONTRARY TO THE DESCRIPTIONS OR TERMS IN THIS MEMORANDUM,
THE PARTNERSHIP AGREEMENT, THE SUBSCRIPTION AGREEMENT OR SUCH OTHER
DOCUMENTS SHALL CONTROL. THE FIRM RESERVES THE RIGHT TO MODIFY THE TERMS OF
THE OFFERING AND THE INTERESTS DESCRIBED IN THIS MEMORANDUM, AND THE INTERESTS
ARE OFFERED SUBJECT TO THE GENERAL PARTNER’S ABILITY TO REJECT ANY COMMITMENT
IN WHOLE OR IN PART. THE FIRM ALSO HAS THE RIGHT AT ANY TIME, IN ITS SOLE DISCRETION,
TO TERMINATE THE OFFER AND SALE OF THE INTERESTS DESCRIBED IN THIS MEMORANDUM.

THE INTERESTS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY UNITED STATES
STATE SECURITIES LAWS OR THE LAWS OF ANY FOREIGN JURISDICTION. THE INTERESTS WILL
BE OFFERED AND SOLD UNDER THE EXEMPTION PROVIDED BY SECTION 4(2) OF THE
SECURITIES ACT AND REGULATION D PROMULGATED THEREUNDER AND OTHER EXEMPTIONS
OF SIMILAR IMPORT IN THE LAWS OF THE STATES AND OTHER JURISDICTIONS WHERE THE
OFFERING WILL BE MADE. THE FUND WILL NOT BE REGISTERED AS AN INVESTMENT COMPANY

Colorado High Yield Fund, LP Confidential & Trade Secret

UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
“INVESTMENT COMPANY ACT”). CONSEQUENTLY, INVESTORS WILL NOT BE AFFORDED THE
PROTECTIONS OF THE INVESTMENT COMPANY ACT. THE GENERAL PARTNER IS NOT
REGISTERED AS AN INVESTMENT ADVISER UNDER THE UNITED STATES INVESTMENT
ADVISERS ACT OF 1940, AS AMENDED (THE “ADVISERS ACT”). CONSEQUENTLY, INVESTORS
WILL NOT BE AFFORDED THE PROTECTIONS OF THE ADVISERS ACT APPLICABLE TO
INVESTMENT ADVISERS REGISTERED UNDER THE ADVISERS ACT.

THE INTERESTS DESCRIBED IN THIS MEMORANDUM ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE FUND’S PARTNERSHIP AGREEMENT AND THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

THE FUND’S INVESTMENTS WILL BE CHARACTERIZED BY A HIGH DEGREE OF RISK, VOLATILITY
AND ILLIQUIDITY. A PROSPECTIVE INVESTOR SHOULD THOROUGHLY REVIEW THE
CONFIDENTIAL INFORMATION CONTAINED HEREIN AND THE TERMS OF THE PARTNERSHIP
AGREEMENT AND SUBSCRIPTION AGREEMENT, AND CAREFULLY CONSIDER WHETHER AN
INVESTMENT IN THE FUND IS SUITABLE TO THE INVESTOR’S FINANCIAL SITUATION AND GOALS.

CERTAIN ECONOMIC AND MARKET INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED
FROM PUBLISHED SOURCES PREPARED BY OTHER PARTIES. WHILE SUCH SOURCES ARE
BELIEVED TO BE RELIABLE, NEITHER THE FUND, THE GENERAL PARTNER, NOR THEIR
RESPECTIVE AFFILIATES ASSUME ANY RESPONSIBILITY FOR THE ACCURACY OR
COMPLETENESS OF SUCH INFORMATION. NEITHER DELIVERY OF THIS MEMORANDUM NOR
ANY STATEMENT HEREIN SHOULD BE TAKEN TO IMPLY THAT ANY INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY STATEMENT CONCERNING THE FUND OR
THE SALE OF THE INTERESTS DISCUSSED HEREIN OTHER THAN AS SET FORTH IN THIS
MEMORANDUM, AND ANY SUCH STATEMENTS, IF MADE, MUST NOT BE RELIED UPON.

PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO RELY ON THE PRIOR RETURN
INFORMATION SET FORTH HEREIN IN MAKING A DECISION WHETHER OR NOT TO PURCHASE
THE INTERESTS OFFERED HEREBY. THE RETURN INFORMATION CONTAINED HEREIN HAS NOT
BEEN AUDITED OR VERIFIED BY ANY INDEPENDENT PARTY AND SHOULD NOT BE CONSIDERED
REPRESENTATIVE OF THE RETURNS THAT MAY BE RECEIVED BY AN INVESTOR IN THE FUND.
CERTAIN FACTORS EXIST THAT MAY AFFECT COMPARABILITY INCLUDING, AMONG OTHERS,
THE DEDUCTION OF FEES AND EXPENSES AND THE PAYMENT OF A CARRIED INTEREST.
CERTAIN FACTUAL AND STATISTICAL INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED
FROM PUBLISHED SOURCES PREPARED BY OTHER PARTIES AND HAS NOT BEEN
INDEPENDENTLY VERIFIED BY THE FIRM. OPINIONS AND ESTIMATES MAY BE CHANGED
WITHOUT NOTICE. IN CONSIDERING THE PRIOR PERFORMANCE INFORMATION CONTAINED
HEREIN, PROSPECTIVE INVESTORS SHOULD BEAR IN MIND THAT PAST PERFORMANCE IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS, AND THERE CAN BE NO ASSURANCE THAT
THE FUND WILL ACHIEVE COMPARABLE RESULTS.

PROSPECTIVE INVESTORS SHOULD MAKE THEIR OWN INVESTIGATIONS AND EVALUATIONS OF
THE FUND, INCLUDING THE MERITS AND RISKS INVOLVED IN AN INVESTMENT THEREIN. PRIOR
TO ANY INVESTMENT, THE GENERAL PARTNER WILL GIVE INVESTORS THE OPPORTUNITY TO
ASK QUESTIONS OF AND RECEIVE ANSWERS AND ADDITIONAL INFORMATION FROM IT
CONCERNING THE TERMS AND CONDITIONS OF THIS OFFERING AND OTHER RELEVANT
MATTERS TO THE EXTENT THE GENERAL PARTNER POSSESSES THE SAME OR CAN ACQUIRE IT
WITHOUT UNREASONABLE EFFORT OR EXPENSE. PROSPECTIVE INVESTORS SHOULD INFORM
THEMSELVES AS TO THE LEGAL REQUIREMENTS APPLICABLE TO THEM IN RESPECT OF THE
ACQUISITION, HOLDING AND DISPOSITION OF THE INTERESTS IN THE FUND, AND AS TO THE

Colorado High Yield Fund, LP Confidential & Trade Secret

INCOME AND OTHER TAX CONSEQUENCES TO THEM OF SUCH ACQUISITION, HOLDING AND
DISPOSITION.

THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, AN INTEREST IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
AN OFFER OR SOLICITATION. NEITHER THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION NOR ANY OTHER FEDERAL, STATE OR FOREIGN REGULATORY AUTHORITY HAS
APPROVED AN INVESTMENT IN THE FUND. FURTHERMORE, THE FOREGOING AUTHORITIES
HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
MEMORANDUM, NOR IS IT INTENDED THAT THE FOREGOING AUTHORITIES WILL DO SO. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS IN THIS MEMORANDUM CONSTITUTE FORWARD-LOOKING
STATEMENTS. WHEN USED IN THIS MEMORANDUM, THE WORDS “MAY,” “WILL,” “SHOULD,”
“PROJECT,” “ANTICIPATE,” “BELIEVE,” “ESTIMATE,” “INTEND,” “EXPECT,” “CONTINUE,” AND
SIMILAR EXPRESSIONS OR THE NEGATIVES THEREOF ARE GENERALLY INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS, INCLUDING THE
INTENDED ACTIONS AND PERFORMANCE OBJECTIVES OF THE GENERAL PARTNER, FUND, OR
ANY PORTFOLIO COMPANY REFERENCED HEREIN, INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES, AND OTHER IMPORTANT FACTORS THAT COULD CAUSE THE ACTUAL
RESULTS, PERFORMANCE, OR ACHIEVEMENTS OF THE GENERAL PARTNER, FUND, OR ANY
INVESTMENT TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS, PERFORMANCE, OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. NO
REPRESENTATION OR WARRANTY IS MADE AS TO FUTURE PERFORMANCE OR SUCH
FORWARD-LOOKING STATEMENTS. ALL FORWARD-LOOKING STATEMENTS IN THIS
MEMORANDUM SPEAK ONLY AS OF THE DATE HEREOF. THE FUND AND THE GENERAL
PARTNER EXPRESSLY DISCLAIM ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY
UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENT CONTAINED HEREIN TO
REFLECT ANY CHANGE IN ITS EXPECTATION WITH REGARD THERETO OR ANY CHANGE IN
EVENTS, CONDITIONS, OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED.

PROSPECTIVE INVESTORS ARE NOT TO CONSTRUE THIS MEMORANDUM AS INVESTMENT,
LEGAL, TAX, REGULATORY, FINANCIAL, ACCOUNTING OR OTHER ADVICE, AND THIS
MEMORANDUM IS NOT INTENDED TO PROVIDE THE SOLE BASIS FOR ANY EVALUATION OF AN
INVESTMENT IN AN INTEREST. PRIOR TO ACQUIRING AN INTEREST, A PROSPECTIVE INVESTOR
SHOULD CONSULT WITH ITS OWN LEGAL, INVESTMENT, TAX, ACCOUNTING, AND OTHER
ADVISORS TO DETERMINE THE POTENTIAL BENEFITS, BURDENS, AND OTHER CONSEQUENCES
OF SUCH INVESTMENT.

PROSPECTIVE INVESTORS SHOULD ALSO REVIEW APPENDIX A – “NOTICES TO INVESTORS”
FOR CERTAIN INFORMATION RELATING TO OFFERS AND SALES OF INTERESTS IN THE FUND TO
INVESTORS IN VARIOUS STATES OF THE UNITED STATES.

*****
Any questions regarding this offering, and any requests for copies of the Memorandum, the Partnership
Agreement and the Subscription Agreement should be forwarded to:

Colorado High Yield Venture Fund I, LP
Attention: Chris Boyd
331 1/2 Main Street
Longmont, CO 80501

[email protected]
(720) 684-6184

Colorado High Yield Fund, LP Confidential & Trade Secret

TABLE OF CONTENTS
Summary Data Sheet.................................................................................................................................... 2
Executive Summary ..................................................................................................................................... 3
Investment Opportunity ................................................................................................................................. 5
Industry Overview ......................................................................................................................................... 6
Market Opportunity........................................................................................................................................ 7
Management and Operations........................................................................................................................ 8
Summary of Principal Terms ...................................................................................................................... 10
Certain Risk Factors ................................................................................................................................... 15
Certain Other Tax and Regulatory Considerations .................................................................................... 28
Additional Information ................................................................................................................................. 35
Appendix A - Notices to Investors ...................................................................................................................

1

SUMMARY DATA SHEET

The following information is presented as a summary of certain of the Fund’s key terms only and is qualified
in its entirety by the more detailed information contained in the “Summary of Principal Terms” contained in
this Memorandum and by the Partnership Agreement, which will be circulated to investors prior to closing.
To the extent that this summary conflicts with the Partnership Agreement, the Partnership Agreement will
control.

TARGET SIZE $50,000,000

MINIMUM COMMITMENT $100,000; lesser amounts accepted at the discretion of the
General Partner

GENERAL PARTNER $1,000,000 and may be increased at the General Partner’s
COMMITMENT
election. Such General Partner Commitment may be
invested pro rata in all investments in the General Partner’s

sole discretion.

TERM 5 years, subject to two additional one-year extensions at the
General Partner’s discretion and additional extensions

thereafter with the consent of a majority in interest of the

Limited Partners

INVESTMENT PERIOD The Term of the Fund

MANAGEMENT FEE; 1.75% per annum of aggregate capital commitments;. The
ACQUISITION FEE;
DISPOSITION FEE Fund will pay the General Partner an acquisition fee of 1%

based upon the gross asset cost of investments made by the
Fund (“Acquisition Fee”). The Fund will pay the General

Partner the Acquisition Fee upon the acquisition of each
Investment. The Fund will pay the General Partner a

disposition fee of 1% based upon the gross asset sale of
dispositions made by the Fund (“Disposition Fee”). The

Fund will pay the General Partner the Disposition Fee upon

the sale of each Investment.

BROKER-DEALER FEE Up to 3% of the funds invested by a Limited Partner may be
used to fees, expenses, or commissions of a licensed
broker-dealer participating with this offering, if any.

CARRIED INTEREST 20% of net profits to the General Partner after 100% of
capital contributions are returned to Limited Partners

GENERAL PARTNER Yes, with a guaranty by each carried interest recipient of its
CLAWBACK share on a several, but not joint, basis

KEY MAN Yes
LEGAL COUNSEL Hasan, LLC

2

EXECUTIVE SUMMARY

Colorado High Yield Fund, LP (the “Fund”) is a $50,000,000 fund that invests in financing instruments with
financial entities in the legal medical and recreational marijuana industry (“MJ”) as well the related
industrial hemp commodity market. Operations are conducted within each state jurisdiction that has passed
laws allowing such industry activity.

The Fund is primarily an investor in funds, ventures, and financial instruments in the cannabis and hemp
industries. The Fund will work to produce distributions to investors from interest returns on financing
provided to dispensaries and cultivation facilities. The Fund purchases earning assets (including, but not
limited to, accounts receivables, credit and debit accounts, stocks, bonds, and other debt instruments)
(collectively, the “Earning Assets”). The Fund purchases consumer receivables and other Earning Assets
at a discount based upon term of the obligation, interest rate, industry of the seller, and consumer credit
quality. The Fund looks for unique opportunities to finance companies that cannot obtain funding from
traditional lending sources or need secondary financing for their subprime consumer base in the cannabis
and/or hemp industry. The Fund does not presently intend to sell its interests in the Earning Assets it
acquires to investors or other third parties, but reserves the right to do so in the future. The discount and
reserve applied to the debts purchased varies based on the credit quality of the debtor, the interest due on
the note and the term of the obligation.

The Fund will seek to accrue and payout no less than a net 15% dividend (“Hurdle Rate”) to the investors.
This Hurdle Rate will be paid to the investors prior to deployment of any additional activities of the Fund.
The Fund is primarily buying loans from a third party lender who originates the loans. The third party lender
sells the loans it generates at a yield of 25% to the Fund who retains a 10% spread for servicing and
maintenance.

Also, the Fund will finance, banking support, credit card processes, and administrative systems to address
operations and government compliance for the industry within the same jurisdictions. This is accomplished
through targeted investments in companies that provide such value-added services. In addition, after due
diligence has been completed, the Fund may purchase Earning Assets from other licensed lending
companies and may also invest in companies that increase their opportunity to secure additional Earning
Assets. Such purchases and investments that will be identified include, but are not limited to:

1. BudTeller, LLC is a company that has developed a comprehensive software and hardware platform
to meet regulatory compliance within the industry. Such software tracks all products from seed to
sale and every individual transaction that is conducted by the licensed MJ entity. This includes an
authorized MC/VISA merchant processing program with banking made available to each licensed
MJ entity. Currently BudTeller, LLC is in licensed MJ facilities in five states and rapidly expanding.

2. Any entity that provides a product liability product to the licensed MJ entity.

3. Any entity that provides human resource support systems, administrative systems, technological
support systems, and payroll software processing systems to retail licensed MJ entities.

4. Any entity that provides value-added services to licensed MJ entities.

5. Financing services to Sling Wholesale, LLC, a Colorado wholesaler of marijuana that buys product
from cultivation facilities and sells to dispensaries. Please note, the Fund will not hold equity
interest, direct or indirectly in any licensed wholesaler, cultivator, or retailer MJ entity.

6. Trust Jane, LLC a company that has developed a kiosk solution for licensed cannabis industry
participants for access to banking, financial services, cash transport, and cash management. The

3

cannabis industry is subject to a number of banking, operational, and regulatory challenges. Cash
management kiosks will create more accountability and traceability of services provided to
consumers which is secure.
Finally, the Fund seeks to develop and manage a diversified portfolio of investments. In order to achieve
this, the Fund will directly and indirectly acquire, invest, manage, sell, transfer, operate or otherwise deal in
investments of securities and venture funds in the cannabis and hemp sector. The Fund will invest both in
control positions, where it will be active in the management of the investment, and in addition to passive
investments.

4

INVESTMENT OPPORTUNITY

The Fund is targeting several states for investment, specifically to those states which have passed
legislation permitting the cultivation, use, and sale of marijuana and hemp. The Fund believes that there are
several mitigating barriers and issues each licensed MJ entity faces. These range from changing
environmental laws that have a direct impact on construction and design of cultivation facilities, new
technological advancements that are currently being designed and pilot tested in cultivation and extraction,
increased regulations to contain inventory and distribution within each state and keep products out of the
hands of minors, financial needs in banking and accessing loans, merchant processing, and product liability
issues. The Fund will look to make investments and joint ventures into organizations and financing
instruments that are resolving these issues.
As the marijuana industry grows, there will be a significant need for financial services to support licensed
cannabis growers and dispensaries and those cultivating hemp for numerous consumer uses. The
ambiguous federal legal status of marijuana and industrial hemp as a Schedule I controlled substance
under the Controlled Substances Act dissuades traditional investors from participating in the financing of
marijuana and hemp-related businesses. The Fund is a vehicle that allows for participation as it will look to
act as a financing and investing entity into third-party companies that conduct such activities. Thus, the
Fund will not directly be involved in the cultivation, extraction, processing, packaging, financing, or selling of
federally illegal substances. The Fund simply makes qualified investments at stipulated rates of return
through its proprietary relationships and affiliations with other entities.
The General Partner is comprised of a team of professionals combining legal, lending, merchant
processing, banking acumen and cannabis and hemp industry expertise. The team has fostered a network
of contacts and relationships building credibility with established licensed MJ operators and entities who are
actively seeking real solutions to their financial services and business needs. The General Partner will
continue to work with companies and affiliates to assist these operators to address opportunities by
providing much needed resources and financial services in accordance with legal regulations.
The Fund is positioning itself to become the first and ultimately one of the largest indirect funding providers
to the cannabis and hemp industry on a national level.

5

INDUSTRY OVERVIEW

Marijuana is now the nation's fastest-growing industry. The legal marijuana industry passed by state
legislation (both medical and recreational combined) brought in $2.4 billion in 2014. That figure represents
an increase of 74%, and it is estimated that the total legal market could be worth $11 billion by 2019.

Of the states that have legalized medical or recreational marijuana, California still has the largest legal
cannabis market in the U.S., at $1.3 billion. Arizona was found to have the fastest-growing major marijuana
market in 2014, expanding to $155 million, up more than $120 million from the previous year. Medical
marijuana is already legal in Arizona and California, and recreational legalization measures are likely to
appear on future ballots in both states. More than 1.5 million shoppers purchased legal marijuana from a
dispensary, either medical or recreational, in 2014.

Five states have marijuana markets that are estimated to be larger than $100 million. In Colorado and
Washington, the first states to open retail marijuana shops in the U.S., consumers purchased approximately
$370 million in marijuana products in 2014. According to the Colorado Department of Revenue, in 2015,
Colorado achieved $996,184,788 in marijuana sales that is up from $669 million in 2014. Colorado also had
$135,000,000 in marijuana taxes paid in 2015. Oregon and Alaska are expected to add an estimated
combined $275 million in retail marijuana sales in their first year of operation.

There are now twenty-four states with medical marijuana programs and four of these states (and
Washington D.C.) have also legalized marijuana for recreational use. The market appears that it will
continue to expand as existing states recognize the tax revenue opportunity and broaden the approved
uses of marijuana and new states such as California, Nevada, Arizona, Maine, Vermont, Massachusetts,
Rhode Island, and Maryland projected to come online in 2016. The total market value of all states legalizing
marijuana may exceed $36.8 billion. Despite the fact that the Federal Controlled Substances Act makes the
use and possession of marijuana illegal on a national level, recent guidance from the federal government
suggests that it will continue to tolerate legalization at the state level if backed by strong and effective
regulation. A point of serious interest is that recreational legalization has occurred via ballot initiatives or by
the direct expressed will of the voters. However, Vermont or Rhode Island could become the first states to
do so through their state legislatures.

Industrial hemp is an agricultural commodity that is cultivated for use in the production of a wide range of
products, including foods and beverages, cosmetics and personal care products, and nutritional
supplements, as well as fabrics and textiles, yarns and spun fibers, paper, construction and insulation
materials, and other manufactured goods. Hemp can be grown as a fiber, seed, or other dual-purpose crop.
Some estimate that the global market for hemp consists of more than 25,000 products. Precise data are not
available on the size of the U.S. market for hemp-based products, but current industry estimates report
annual sales at more than $580 million annually. Over 200,000 acres of hemp have been cultivated globally
in 30 countries, yielding over 380 million pounds per year since 2011.

6

MARKET OPPORTUNITY

Not since the repeal of Prohibition in 1933, has a consumer product business opportunity of this size been
created simply by changes in the law.

Medical

The last five years have seen a shift in the public’s position on medical marijuana and this is reflected in the
direction of individual states. Twenty-four states and the District of Columbia have enacted medical
cannabis laws, and there are now over one million registered patients within these states. The five states
with the largest known current medical marijuana patient populations per every 1,000 state residents are:
Colorado, Washington, California, Oregon, Michigan and Maine.

Recreational

In November 2012, Colorado voters legalized recreational marijuana use. This history-changing legislation
has created a window of opportunity for the commercialization and state taxation of marijuana. In July of
2014, Washington State launched its recreational program and in November 2014, Oregon and Alaska and
the District of Columbia voted to introduce recreational programs commencing in 2015.

Marijuana consumption is estimated to be $60 billion, with growth of about 8 percent annually. Colorado
became an important state of the marijuana industry last year, recording about $805 million in combined
retail and wholesale sales. In 2013, the legal US cannabis market was a $1.4 billion industry, targeted to
grow to $10 billion by 2018.

Industrial Hemp

At least 28 states have laws in place related to industrial hemp Industrial hemp for use in the production of
a wide range of products (an estimate 25,000 different products world-wide), including foods and
beverages, cosmetics and personal care products, and nutritional supplements, as well as fabrics and
textiles, yarns and spun fibers, paper, construction and insulation materials, and other manufactured goods.
The U.S. market for hemp-based products is estimated at more than $580 million annually. Generally,
states have taken three approaches: (1) establish commercial industrial hemp programs, (2) establish
industrial hemp research programs or (3) authorize studies of industrial hemp or the industrial hemp
industry as authorized by federal. Some states establishing these programs require a change in federal
laws or a waiver from the U.S. Drug Enforcement Agency prior to implementation. In addition, the Industrial
Hemp Farming Act of 2015 is currently being reviewed by Congress, which would exclude hemp from the
definition of marijuana, making them not subject to the Federal Controlled Substances Act or Drug
Enforcement Agency regulation.

Changes in the industry, including public perception and legislative action indicates a potential upswing in
cannabis and hemp market participants which will need to access to legitimate financial services.

7

MANAGEMENT AND OPERATIONS

General Partner

Colorado High Yield Fund, LLC, a Delaware limited liability company, will act as the General Partner of the
Fund. The General Partner will be responsible for managing the Fund's operations and will delegate
substantially all of its responsibilities to the Principals.

Manager

The Fund will be managed on a day-to-day basis by the General Partner’s Principals who are a team of
senior professionals. The Principals bring proven capabilities and a vast collective knowledge of lending,
identifying, evaluating, pricing, underwriting and acquiring performing Earning Assets as well as loan
servicing and maintenance experience across all asset types. Further, the Principals have developed an
extensive network and cultivated relationships for sourcing, partnering and conducting due diligence in an
opportunistic market to conducts its primary responsibility to develop, maintain, and document internal
compliance controls, and manage the Fund’s operations as well as ensure legal compliance in the
financing, cannabis, and hemp industries respectively. Finally, the Principals together have expansive
experience and in-depth knowledge of evaluating and investing in private equity investments.

Use of Broker-Dealer

The Fund may engage with a registered broker-dealer for the sale of securities in connection with this
offering. The Fund and General Partner expects to pay up to 3% of the gross proceeds from the offering for
due diligence fees, referral fees, commissions, and expenses paid to the participating broker-dealer. The
Fund will not pay referral or similar fees to any accountants, attorneys, or other persons in connection with
the sale and distribution of securities hereunder. The Fund’s broker-dealer will be compliant all applicable
laws.

Principals

Tab Turner-Principal

Mr. Turner is the leading consumer advocate litigation attorney in the United States. He is known
for his broad reaching contribution in revealing Ford’s and Firestone’s reckless design decisions
pertaining to the Ford Explorer rollovers, as well as other automotive safety issues. His landmark
win over Ford and Firestone was the focus of the December 2000 New York Times Magazine cover
story and the 2003 book, Tragic Indifference. In one of his most recent milestone cases, Turner
successfully sued Arab Bank for financing terrorist activities. He has been featured on 60 Minutes
and the PBS program, Frontline. In 2001, he was named “Trial Lawyer of the Year” by Trial
Lawyers for Public Justice, a national citizen rights organization supported by the best trial lawyers
in America. Mr. Turner’s network includes friends and associates at the highest levels in
Washington D.C., professional sports, and Hollywood. James Brolin will play the role of Tab Turner
in the upcoming motion picture, Tragic Indifference, based upon the 2003 book. Mr. Turner’s
demand for excellence drives an experienced management team to constantly improve the basic
earning power of our companies, adding value to shareholders.

Chris Boyd-Principal

Mr. Boyd comes to us as an individual grounded in financial stabilization. He has been involved in
the direct and indirect banking and finance industries, as well as legal and educational industries
over his past 22 years of employment. His responsibilities have encompassed a wide variety of
skills including data analysis, forecasting, budget management, accounting, oversight and auditing,

8