Marijuana Business Factbook 2019

284 Marijuana Business Factbook 2019 Chapter 7 | Cannabis Business Funding & Investing © 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. FOR INVESTORS FUNDING CANNABIS COMPANIES CHART 7.10: Percentage Of Operational Marijuana Businesses Actively Seeking Funding Or Planning To In 2019 Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Percentage Of Operational Marijuana Businesses Actively Seeking Funding Or Planning To In 2019 Wholesale Cultivators Vertically Integrated Medical & Recreational Retailers Cannabis Product Manufacturers Ancillary Technology & Products Companies Producers/Processors Stand-Alone Medical Dispensaries & Rec Stores Ancillary Services Firms 68% 52% 50% 46% 41% 35% 25% Across all marijuana business segments, 51% of companies are actively seeking funding or plan to seek funding in 2019 ― nearly 10 percentage points higher than a year ago. This ranges from 25% of ancillary services firms to nearly 70% of wholesale cultivators. Last year, only four in 10 wholesale cultivators indicated they were seeking funding. But the business climate for this segment is more challenging now, with record-low prices and an intensely competitive environment in some states. About half the vertically integrated retailers and cannabis product manufacturers are seeking or planning to seek funding. Vertically integrated businesses have the greatest capital requirements of all segments as these businesses operate at least one retail storefront and one cultivation facility ― and they may be involved in cannabis product manufacturing as well. Although the revenue potential can be quite strong, startup and operating costs are high. Cannabis product manufacturers are in a similar boat, as extraction and manufacturing equipment can be quite costly and require a degree of skilled labor. Master extractors are one of the highest-paid nonexecutive positions within the cannabis industry. A little less than half the ancillary technology and products companies are seeking or planning to seek funding. Depending on the type of technology or product offered, these companies may require significant cash for research and development or to produce initial inventory before sales begin. Ancillary services firms require less funding as these companies are more labor intensive than capital intensive at the outset. They may spend more on wages than other types of businesses but spend less on other types of operating costs like rent or utilities.