“The end of cannabis prohibition is inevitable.”
That is one of the core principles of Privateer Holdings, a Seattle-based private equity firm investing exclusively in the legal cannabis industry. Judging by the $100 million-plus funding round Privateer closed in January, the company is not having difficulty finding investors who subscribe to the company’s mantra.
The activity of Privateer embodies a broader movement to invest in cannabis companies, whose tailwinds are gaining speed. According to the Viridian Cannabis Deal Tracker, a data analytics service monitoring the industry, $1.23 billion was invested during the first five weeks of 2018- a whopping seven-fold increase from the same period in 2017 and nearly matching investment activity for all of 2016. These numbers aren’t a fluke, either; the cannabis industry’s momentum has been building over the past couple of years.
Small retail players were all over the cannabis space in 2016 and had been during the industry’s early stages of growth. But now, big money (i.e. institutions, fund managers, etc.) is getting behind the undeniable movement. To that end, it’s time investors once again revisit the legal pot space if they’ve let it slip out of their focus. The industry is entering the post-hype phase for legal cannabis, which has seen legitimate companies with multi-billion-dollar valuations evolve and are backed by hundreds of millions of dollars in investments.