Despite the industry's precarious legal status, investors are flocking to states where voters have legalized cannabis.
The cannabis industry raised more than $1 billion in 2016, according to the latest report from a New York firm that tracks marijuana industry investments, mergers and acquisitions. The largest chunk of capital went into biotech and pharmaceutical-related enterprises, followed closely by cultivation and retail, according to the report from Veridian Capital Advisors.
The company tracked 304 capital raises in 2016 for a total of $1.09 billion. They include 239 public companies raising $836.1 million. Private capital raised by 65 companies totaled $255.8 million.
Companies in North America raised the bulk of the capital, including many in Canada, where medical marijuana is legal nationally and Prime Minister Justin Trudeau has made national legalization of recreational marijuana a goal of his administration.
Veridian reported that many sectors involved with the cannabis industry raised more capital in 2016 than the previous year. They include:
- Agriculture technology
- Consulting services
- Cultivating and retail
- Real Estate
Veridian also reported a spike in investments, mergers and acquisitions across almost all sectors.
Some of the latest deals involved raising capital, land purchases and acquisitions.
In Canada, Supreme Pharmaceuticals in December closed an offering to secure $55 million in financing through the issuance of unsecured convertible debenture and 42,350,000 common shares. The company plans to use the revenue generated by the offering to expand operations at its hybrid greenhouse in Kincardine, Ontario.
The Toronto-based company is seeking to expand its business in the production of medical marijuana.
Also in December, Vancouver, B.C., company Arcturus Growthstar Technologies purchased 15 acres in Redland, Fla., that is zoned for use in the production of medical marijuana. The land lies within Miami-Dade County.
Florida voters approved expansion of medical marijuana use in the November 2016 election.
“With this 15-acre acquisition, Arcturus is positioning itself to be a part of Florida’s cannabis market as it rolls out in 2017,” William Gildea, CEO of Arcturus Growthstar Technologies, said in a statement.
According to the company, this marks the second purchase Arcturus rowthstar Technologies has made in Florida for cannabis production. The first involved a 10-acre greenhouse near Orlando.
ATLANTA COMPANY RAISES $15 MILLION.
In Atlanta, Surterra Holdings raised $15 million to increase its medical marijuana production for the state of Florida. The company is one of six currently licensed by the state to grow medical marijuana. Surterra already has opened an office in Tampa.
And in Colorado, MassRoots, a technology platform for the cannabis industry, acquired Whaxy for $100,000 and 2.9 million shares of the company’s common stock. Whaxy provides an online ordering platform for licensed cannabis retailers. The company has processed more than $5 million in transactions, according to a press release from MassRoots.
“This acquisition, when completed, will expand MassRoots' offerings to include a full suite of dispensary software solutions – online ordering, marketing, and real-time inventory management— for cannabis businesses," said CEO Isaac Dietrich in the release.