Canadian marijuana cultivators are raking in capital

Canada’s federally licensed medical marijuana cultivation companies have raised roughly 700 million Canadian dollars ($524 million) in the past six months, according to canna-centric analysis firm Canaccord Genuity.

The investment frenzy started in the third quarter of 2016 when investors injected more than CA$150 million ($112 million) into publicly traded and privately held Canadian MMJ growers, the Canaccord report said, according to the Calgary Herald. But that amount more than doubled in the final three months of the year to more than CA$350 million ($262 million), while this year’s first quarter, which ends March 31, has seen close to CA$350 million in investments.

That’s a big jump from earlier investment action. Between the second quarter of 2014, when Canaccord started tracking Canadian MMJ cultivation companies, and the third quarter of 2016, investors put less than CA$200 million ($150 million) into these firms.

What explains the boom?

“As most (producers) eye aggressive expansion plans to address the anticipated recreational market, investors are stepping up to fund this growth,” Canaccord analysts wrote in their report, according to the Calgary Herald.

The increased investor interest was also spurred by the momentum generated in the U.S. when voters in seven states legalized recreational and medical marijuana last November.