Marijuana Business Factbook 2019

194 Marijuana Business Factbook 2019 Chapter 3 | Financial & Operational Data: Wholesale Cultivators © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. WHAT SHOULD WHOLESALE CULTIVATORS CONTINUE TO MONITOR? CHART 3.11: Portion Of Investors Planning Investments In Wholesale Cultivation Businesses: Breakdown By Year Source: 2017, 2018 and 2019 Marijuana Business Factbooks © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Portion Of Investors Planning Investments In Wholesale Cultivation Businesses: Breakdown By Year 2017 2018 2019 61% 43% 38% In the immediate future, investor interest in the wholesale cultivation space is waning. This is likely driven by the significant number of headwinds facing growers ― namely, market saturation, oversupply and falling prices. However, investors likely will view cultivators that can grow at a large scale and keep production costs low as an asset worthy of investment. Investment into cultivation still occurs, however, much of it involves either vertical integration or significant scale. The multimillion-dollar merger, acquisition and capital raise activity throughout late 2018 and into early 2019 in the cultivation space largely involved either a vertically integrated company acquiring a nonvertical cultivator or raising funds to expand their own vertical operation, or a large-scale cultivation company raising funds to expand into new markets. Even in markets that are saturated, a cultivation license in good standing is an asset. For example, in Oregon’s competitive, oversupplied market, a cultivation license still has market value because of its future potential. While the state’s ample production capability is currently serving a detrimental function, in a future with federal legalization and interstate commerce, growers would be able to ship their product across state lines and potentially overseas. In this scenario, favorable growing conditions and a well-developed cultivation infrastructure position Oregon as one of the nation’s premier cannabis production regions.