Most investors see private credit and assume it’s “too good to be true.” But in private credit, especially in underbanked niches like cannabis lending, structures can look very different — often with stronger downside protection, tighter covenants, and less leverage than people expect.

Recently on The Passive Income Playbook, featured on the Best Ever CRE network, Pascal Wagner sat down with Peter Sack, Managing Partner at Chicago Atlantic, to break down how his firm has deployed $2B+ in private credit.

You’ll learn how they approach first-lien lending, why cannabis lending carries unique regulatory moats, and how LPs should evaluate the differences between private funds, REITs, and BDCs.

In this episode:
 ✅ Why underserved markets create better lender terms (lower leverage, higher yields)
 ✅ Cannabis credit explained: state licensing, oligopolies, and downside protection
 ✅ How Chicago Atlantic achieves targets with senior-secured positions
 ✅ The trade-offs between private funds vs. public REITs (REFI) vs. BDCs (LIEN)
 ✅ How to underwrite debt funds: lien position, leverage, audits, and non-accruals
 ✅ What federal policy shifts could mean for LPs in this space

Peter also breaks down:
 • Why covenants, guarantees, and documentation matter more than headline yield
 • How diversification vs. specialization changes risk-adjusted returns
 • Why 20–30% of their portfolio sits outside cannabis—but under the same credit lens

Whether you’re interested in income-focused alternatives or want to strengthen your private credit framework, this episode breaks down how LPs can position themselves at the top of the capital stack with stronger protections.

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Chapters:
00:00 – Why Private Credit Structures Look “Different”
02:22 – How Underserved Niches Create Better Terms for Lenders
03:28 – Cannabis Credit 101: Why State Licenses Create Moats
10:55 – First-Lien Advantage & Capital Protection
12:59 – Why Banks Withdrew — and How That Opened the Door
14:36 – How Chicago Atlantic Thinks About Risk Controls
24:29 – Public vs. Private: Comparing REFI, LIEN, and Private Funds
31:22 – BDCs Explained: A Lesser-Known Credit Vehicle
34:09 – Beyond Cannabis: Applying the Same Credit Lens Elsewhere
50:18 – LP Due Diligence: 5 Questions to Ask Before Wiring Money