) — The cannabis industry growth index has been rising for years now, but it looks like 2018 is setting itself up to break all previous records. Global financing funneled into the marijuana industry and its derivatives blew past the $1.4 billion mark just six weeks into the year.
NY-based advisory and marketing intelligence firm Viridian Capital, says that the outstanding growth represents a year-to-date increase in capital investment of 580%.
The marijuana industry at large could raise up to $13 billion if the trend were to subsist through the year. That number would be 4x more than the total amount raised in the entirety of 2017.
Growing interest from investors towards the Canadian marijuana business, tapped for legalization in mid-2018, is largely responsible for the awe-inspiring spike in funding. Canada will be the first G7 nation to legalize adult recreational use.
The federal level depenalization of Marijuana in the Great White North has boosted investor confidence levels. They are now much more eager to inject capital into the country‘s cannabis companies. In turn, funding deals much more frequent.
Understanding the landscape
- 42 capital raises took place over the past 3 weeks. Of that total, 30 were related to Canadian marijuana businesses. Worldwide, 79 capital raises have been tallied in the sector. 2017 had seen 39 up to this same point of the year – signalling a 103% increase.
- Financial institutions are still wary of lending money to cannabis businesses. Of the 30 deals, 85% were in exchange for equity – mostly by security-selling publicly traded companies. Many of those would rather take on debt.
- 50%+ of the total capital raised in the year has gone to the cultivation and retail sectors. Licensed MJ producers will operate the sector. They will be the sole providers of recreational marijuana once legalization begins this summer.