After a lackluster 2020 amid the pandemic and an economic downturn, investment in the cannabis industry has reawakened, with the amount of capital raised up 118% over 2020 as of Sept. 10. Year-to-date 2021 activity has equaled or even surpassed investment in 2019 in four of the top five sectors, according to data from New York-based Viridian Capital Advisors.
Cultivation and retail, the bread-and-butter sector of the industry, remains the largest by far, with year-to-date raises topping $6 billion. The second-largest sector, investments/M&A, has seen raises of less than $1 billion so far this year.
For sectors with raises totaling less than $400 million through Sept. 10, 2021, the recovery has been a bit slower. Only one segment, biotech/pharma, has returned to 2019 levels. But since 2017, investment in that sector has declined significantly, from nearly $1 billion to only $231 million so far in 2021, even though the number of raises has declined by only five.
By percentage growth, the agriculture-technology sector has experienced a significant pickup in 2021. Year-to-date, the sector’s total capital raised has far outstripped any previous full year of activity. Before this year, the sector’s highest total raised was just $123.1 million; in 2021, the sector raised $487.6 million with four months to go.
The industry continues to get more sophisticated, with entrepreneurs looking for additional ways to improve efficiency and scale. Because of this, the agriculture-technology sector still has a long runway for additional growth.
Data Source: Viridian Capital Advisors is a financial and strategic advisory firm dedicated to the cannabis market. The firm provides capital, M&A, corporate development and investor relations services to emerging growth companies and qualified investors in the cannabis sector.