Institutional Investment Into Cannabis Is Inevitable
Up to this point financing of legal cannabis in the U.S. has relied largely on private money - friends and family raises, high net-worth individuals, and small to medium sized private investment firms. Banks and large investors have shied away from companies in the cannabis space, even for businesses that do not touch the plant. The federal prohibition on cannabis has led to this situation in which small investors and venture funds have become the industry’s financial backbone. This moment in time of individual investing power in cannabis is waning, however. As cannabis normalizes and as laws relax industry participation by institutional investors is inevitable. The only question is how prepared current cannabis stakeholders will be when it happens.