The US marijuana space attracted over US$10 billion in investment this year, says an industry economist and researcher.
According to a new report from NBC News, Beau Whitney, vice president and senior economist with cannabis research and data venture New Frontier Data, has confirmed that investors added US$10 billion throughout 2018 to the American cannabis market.
The researcher expects 2019 to reach over US$16 billion for the total North American cannabis scene.
“Investors are getting much savvier when it comes to this space because even just a couple of years ago, you’d throw money at it and hope that something would stick,” Whitney said. “But now investors are much more discerning.”
The ability of investors in the space to pick out established business models in the emerging market has grown as the industry continues to mature.
“It’s abundantly clear that the investor appetite has moved from people with cultivation licenses and ambitious programs to build greenhouse capacity … to companies that are investing in portfolios of intellectual property,” Richard Carleton, CEO of the Canadian Securities Exchange, said during a panel at the Arcview Investor Forum in Las Vegas.
Carleton’s comment alludes to the increased scrutiny the space is receiving from investors. Market watchers are increasingly aware that the idea of a successful cannabis business doesn’t necessarily mean only growing the plant anymore.
The Canadian exchange saw its listings and investments grow as it opened its doors to US-based cannabis businesses seeking a public listing.
In October, Carleton said the CSE had seen C$1.5 billion raised for its US cannabis listings throughout the year. He added that the figure is in constant flux as new issuers appear regularly on the exchange.
Whitney said the investment figure seen in 2018 for the US cannabis market topped the amount for the past three years, representing rapidly growing interest in the space.
As more US states seek to add revenues from cannabis programs, the overall industry is set to continue growing in 2019. Click here to read more about next year’s cannabis outlook.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.