UC Asset Moves ahead with Public Offering of 8% Dividend Preferred Units

UC Asset LP Sets the Stage for New Public Offering

In an exciting development for investors, UC Asset LP (OTCQB: UCASU) has officially filed Form 1A with the SEC for a secondary public offering (SPO). This move, announced on May 12, 2025, is a strategic play aimed at issuing up to $10 million in preferred shares that promise an attractive 8% per annum dividend. However, the offering waits for SEC qualification before securities can be sold.

This initiative comes as UC Asset LP seeks to position itself strategically within the evolving cannabis market, which has faced significant fluctuations in recent years. The founder of UC Asset, Larry Wu, expressed confidence that now is the time for renewed growth in the legal cannabis industry. "We believe the legal cannabis industry has hit bottom after four years of consolidation, and a new growth wave is anticipated soon," stated Wu during the announcement.

The rationale behind this optimism can be traced back to the first wave of cannabis market growth, which kicked off in 2012. That initial boom saw some stocks from cannabis property companies swell by an incredible 1400% in just four years. However, as the market corrected, prices for many cannabis properties plummeted, with some stocks losing over 95% of their value since their 2021 peak. Many cannabis property owners have since found themselves in dire straits, resulting in a pervasive decrease in property values across the sector.

Despite the cautionary tale of dwindling valuations, Wu remains optimistic. Drawing on historical patterns, he noted that industries typically encounter multiple waves of growth before reaching saturation. In his view, the cannabis industry has the potential to experience three to five such growth waves, suggesting that it has yet to achieve its full potential. Echoing the famous advice of Warren Buffett, Wu added, "We ought to be greedy now, when others are fearful."

A Balanced Approach: The Hedging Strategy

While UC Asset is gearing up for anticipated growth, it is also establishing a hedging strategy to protect investors from potential losses. Wu asserted that they will only opt for cannabis properties that could be repurposed into non-cannabis assets if the market fails to rebound as expected.

For instance, UC Asset is pursuing letters of intent (LOIs) to acquire cannabis properties priced below the regional warehouse averages. This versatility in asset management is designed to ensure that if the cannabis industry doesn’t launch into another growth phase, these properties can still be converted into warehouses, allowing the company to remain profitable under unfavorable market conditions.

The preferred shares UC Asset is offering carry a dual appeal: they promise an 8% annual dividend—significantly higher than the 4.9% average total return of REITs for 2024—and they come with potential for conversion. If the cannabis industry experiences unexpectedly rapid growth, shareholders could convert their preferred shares into common shares at net book value, creating an enticing upside for those who invest.

Conversely, should the cannabis industry falter, shareholders might trigger a redemption clause, allowing them to redeem their shares at face value, providing a fallback option that further underlines UC Asset's commitment to investor safety.

Next Steps for Investors

For those interested in exploring this opportunity, detailed information regarding the offering, including the certificate of preferred units to be offered, can be found on the SEC’s EDGAR page dedicated to UC Asset. The company’s innovative investment strategies will likely make this offering a point of interest for investors looking to dip their toes into the evolving landscape of cannabis real estate investment.

As UC Asset navigates this challenging yet promising terrain, its approach unfolds a unique narrative in the investment world—one rooted in innovation, strategy, and cautious optimism about the future of the cannabis market. Investors are encouraged to keep an eye on developments as the company progresses through the SEC review and awaits the green light to proceed.

For further details, potential investors can visit UC Asset's website.