Canada's Impending Legal Weed Market Is Causing an Explosion of Investments
The cannabis industry is projected to exceed $63 billion by 2024, and investors are increasingly eager to get a piece of the pie.
Published on June 22, 2018

Photo via iStock/ joshlaverty

On October 17th, Canada will finally open the doors of the world's largest legal recreational cannabis market for business. A recent report has suggested that a majority of Canadians are fully ready to support their country's burgeoning new industry, which is expected to lead to over $7 billion in sales next year. Two years ago, the value of the legal cannabis market throughout the whole world was only $14.3 billion, but the spread of legalization across North America is expected to push the industry to over $63 billion by 2024.

As the projected market value of the industry grows, an increasing number of investors are summoning the courage to throw their money into the ring. This January, Seattle-based private equity firm Privateer Holdings made $100 million in cannabis investments, the largest-ever single investment in the history of the industry. A number of American canna-businesses, shut out of the U.S. financial industry due to the ongoing federal prohibition of cannabis, have set their sights on Canada, listing their companies on the Canadian Securities Exchange (CSE).

A new report by financial media company Benzinga found that investors dumped $1.23 billion into the cannabis industry in the first five weeks of 2018, an exponential increase from the $178 million invested in the industry a year earlier, according to "Investments in cultivation and retail this year have been driven predominantly by the Canadian player,” said Viridian Capital Advisors' Vice President Harrison Phillips in a statement. “This has been happening pretty consistently from late 2016 through 2017. This reflects the necessity to scale cannabis businesses, to get some kind of advantage, and to explore strategic opportunities, both through acquisitions and international expansion."

Many Canadian canna-businesses are also working to get a piece of America's growing cannabis industry, confident that legislative attempts to protect state-legal cannabis industries will eventually succeed. Last month, Canopy Growth Corp., Canada's largest marijuana firm, applied to become the first cannabis company to be listed on the New York Stock Exchange. Federal law prohibits American businesses from going public, but there is no law preventing a foreign canna-business from trading on the stock market.

High Hampton Holdings Corp., which trades on the CSE, recently announced that it acquired 420 Realty, LLC for over $6.5 million, and will be using this acquisition to open new cannabis cultivation, processing, manufacturing, and distribution facilities in Cudahy, California, near Los Angeles. In another example of recent investments, Surna Inc., who create environmental control and air sanitation systems for cannabis grows, recently secured an investment of over $1.2 million to further expand into both the U.S. and Canadian cannabis markets.

Though retail pot sales won’t start until October, one thing is already clear: legalization in Canada is taking the green rush to new heights.

Chris Moore
Chris Moore is a New York-based writer who has written for Mass Appeal while also mixing records and producing electronic music.
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