Explore 22 active cannabis venture capital investors fueling startup growth. Uncover the highs, lows, and the $5.4B cannabis funding landscape since 2014.
As the cannabis industry continues to grow and evolve, so does the need for investment opportunities. Whether you’re a seasoned investor looking for a new avenue or an entrepreneur seeking capital for your cannabis business plan, this blog is your ultimate guide to navigating the world of cannabis venture capital. From understanding the unique challenges and opportunities of cannabis investments to learning how to create a comprehensive cannabis business plan, we’ll cover it all.
How Much Venture Capital Funding Have Cannabis Businesses Received So Far?
The cannabis industry has been a hotbed of innovation and potential for both entrepreneurs and investors alike. Over the years, venture capital investors have poured billions of dollars into cannabis-related companies, hoping to capitalize on the growing market and changing regulations. The funding landscape in the sector has experienced significant fluctuations, with peaks and valleys that reflect the evolving nature of the industry.
Understanding the Funding Landscape
According to Crunchbase, a leading platform for tracking venture capital investments, venture capitalists have invested a staggering $5.4 billion into 544 cannabis-related companies worldwide since 2014. This influx of funding has fueled the growth and development of numerous startups in the cannabis space, ranging from cultivation and extraction to retail and technology.
The Peak in 2019
The year 2019 witnessed a significant peak in venture capital funding for cannabis companies, with nearly $1.9 billion handed out to 178 companies. This surge in funding can be attributed to several factors, including the growing acceptance of cannabis in various jurisdictions, the relaxation of regulations, and the increasing consumer demand for cannabis products. Investors saw the potential for substantial returns and were eager to jump on the bandwagon.
The Decline in 2022
In 2022, the cannabis venture capital landscape took a sharp turn. The total value of private equity and venture capital investments in the sector plummeted by a staggering 79% compared to the previous year, reaching a mere $796 million. This decline can be attributed to several factors.
1. The cannabis market is still in its nascent stages, with many countries yet to establish federal cannabis legislation. Investors are wary of the uncertainty and risks associated with operating in a market that is heavily reliant on changing regulations. The lack of a clear legal framework in major markets like the United States creates a level of uncertainty that dampens investor enthusiasm.
2. Investors are waiting to see existing cannabis companies turn profitable and sustainable before committing more capital. The industry has seen rapid growth, but profitability remains a challenge for many companies. Investors are cautious about pouring more money into an industry that has yet to prove its long-term viability and profitability.
The Current State of Funding in 2023
As of 2023, Crunchbase reports that $367 million in cannabis venture capital funding has been recorded to date. While this figure is significantly lower than the peaks of previous years, it indicates a gradual recovery in investor sentiment. As more countries establish federal cannabis legislation and existing companies demonstrate profitability, investor confidence is likely to rebound.
Looking Ahead
The cannabis venture capital landscape is ever-evolving, driven by changing regulations, market dynamics, and investor sentiment. While the industry initially witnessed a surge in funding, the decline in recent years reflects the cautious approach of investors. As the industry matures and companies navigate the challenges of profitability and sustainability, the potential for renewed investor interest looms on the horizon.
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Have There Been Any Notable Acquisitions in the Cannabis Industry?
As the cannabis industry continues to evolve and grow, we have seen a number of notable acquisitions take place in recent years. These acquisitions highlight the increasing consolidation and maturation of the cannabis market. Let’s take a closer look at each of these acquisitions and the companies involved.
1. Harvest Health & Recreation Acquired by Trulieve Cannabis ($2.1B USD, 2021)
In 2021, Trulieve Cannabis, one of the leading cannabis companies in the United States, acquired Harvest Health & Recreation in a deal worth $2.1 billion USD. This acquisition brought together two significant players in the industry, creating a powerhouse with a strong market presence across multiple states.
2. Nuuvera Acquired by Aphria ($826M CAD, 2018)
Aphria, a Canadian cannabis company, made a significant move in 2018 by acquiring Nuuvera for $826 million CAD. This acquisition expanded Aphria’s global reach, particularly in Europe, as Nuuvera had established operations and partnerships in various international markets. The deal solidified Aphria’s position as a key player in the international cannabis industry.
3. Redecan Acquired by HEXO Corp ($610M CAD, 2021)
HEXO Corp, a leading licensed producer of cannabis in Canada, made a strategic move in 2021 by acquiring Redecan for $610 million CAD. Redecan is known for its high-quality products and efficient production capabilities. This acquisition strengthened HEXO’s position in the Canadian market and enhanced its production capacity.
4. Gage Cannabis Acquired by TerrAscend ($545M USD, 2021)
TerrAscend, a vertically integrated cannabis company, acquired Gage Cannabis in 2021 for $545 million USD. Gage Cannabis is known for its premium cannabis products and strong retail presence, primarily in Michigan. This acquisition allowed TerrAscend to expand its footprint in the U.S. market and gain access to a growing customer base.
5. Supreme Cannabis Acquired by Canopy Growth Corporation ($434M CAD, 2021)
Canopy Growth Corporation, one of the largest cannabis companies in the world, acquired Supreme Cannabis in 2021 for $434 million CAD. Supreme Cannabis is recognized for its premium brands and strong distribution network in Canada. This acquisition further solidified Canopy Growth’s position as a dominant player in the Canadian cannabis market.
6. Vivo Cannabis Acquired by Canna Farms Ltd ($133M USD, 2018)
In 2018, Canna Farms Ltd acquired Vivo Cannabis for $133 million USD. This acquisition brought together two Canadian cannabis companies with complementary strengths and expertise. Vivo Cannabis was known for its cultivation facilities and premium cannabis products, while Canna Farms had a strong focus on medical cannabis. The merger allowed the combined entity to leverage its resources and expertise for further growth.
Looking to the Future of Cannabis M&A
While the number of notable acquisitions in the cannabis industry has been relatively limited compared to other industries, this can be attributed to the industry still being in its early stages of development. As the cannabis industry matures and regulatory frameworks become more established, we can expect to see an increase in merger and acquisition activity.
Consolidation is a natural progression in any industry, and cannabis is no exception. As companies strive to gain a competitive edge, expand their market share, and capitalize on economies of scale, mergers and acquisitions will likely become a common strategy. This trend will further shape the landscape of the cannabis industry and pave the way for more innovative and successful cannabis ventures.
Pro Tip for Cannabis Business Operators
Streamlining operations is crucial for successful cannabis cultivators in order to focus on business expansion. They use seed to sale software as it provides a comprehensive solution for managing all aspects of their operations, from cultivation to distribution, and allows them to optimize efficiency and maximize profitability.
Did you know? GrowerIQ has an industry-leading Seed-to-Sale Cannabis Software (with quality management built in) that is designed to uncomplicate cannabis production for cannabis producers throughout the world.
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22 Active Cannabis Venture Capital Investors Funding Startups Now
Securing funding is crucial for entrepreneurs looking to scale their businesses. To shed light on the landscape, we’ve compiled a list of 22 venture capital investors who have recently funded cannabis-related companies, according to Crunchbase. From seasoned industry veterans to innovative newcomers, these investors are at the forefront of driving growth and innovation in the cannabis space. So, let’s dive in and explore each of these 22 investors and what they bring to the table.
1. KEY Investment Partners: Institutional-Quality Investment Management for Cannabis
KEY Investment Partners specializes in providing institutional-quality investment management for emerging markets like cannabis. With the increasing pace of legalization, the cannabis industry is poised for historic growth and consolidation. KEY Investment Partners aims to capitalize on this potential and be at the forefront of driving industry success.
2. Poseidon Asset Management: Harnessing the Green Wave
Poseidon was founded by siblings Emily & Morgan Paxhia in 2013, making their first fund one of the longest running dedicated cannabis investment funds. The Poseidon team is considered a leader in the cannabis industry. This recognition, in conjunction with Poseidon being a first mover in the cannabis investment space, has led to a level of trust with industry insiders.
3. Poseidon Asset Management: Harnessing the Green Wave
Poseidon was founded by siblings Emily & Morgan Paxhia in 2013, making their first fund one of the longest running dedicated cannabis investment funds. The Poseidon team is considered a leader in the cannabis industry. This recognition, in conjunction with Poseidon being a first mover in the cannabis investment space, has led to a level of trust with industry insiders
4. Merida Capital: Responsible Investing Across the Cannabis Ecosystem
Merida Capital Holdings is a private equity firm targeting fundamental growth drivers underpinning the rapid development of the cannabis industry. Their investment emphasis focuses on cultivation technologies, products and services associated with the evolution of cannabis as an agricultural product, a natural plant-based medicine, a constituent in pharmaceutical formulations, and a recreational consumer product.
5. LAGO Innovation Fund: Providing Capital for Growth & Innovation
Since its founding in 2019, entrepreneurs and their sponsors have chosen LAGO’s flexible debt and equity capital platform as the financing source for their fast-growing businesses. We are proud to have partnered with the leaders and entrepreneurs who are challenging the status quo and creating innovating business solutions. Listed below are some of the companies we’ve been fortunate enough to partner with:
6. Rackhouse Venture Capital: Bridging AI/ML and the Real World
Rackhouse Ventures is a venture capital management firm that seeks out founders and firms at the intersection of artificial intelligence/machine learning (AI/ML) and real-world applications. By harnessing the power of data, Rackhouse aims to make the world more efficient. Their focus on AI/ML in the cannabis industry sets them apart as a forward-thinking investor.
7. Synaptogenix: Expertise in Neurosciences and Drug Development
With a management team boasting over 30 years of experience in the development of Bryostatin and Platform Drugs, Synaptogenix has secured over $200 million in funding from prestigious institutions such as the Blanchette Rockefeller Neurosciences Institute and the National Institutes of Health (NIH). Their focus on neurosciences positions them as a valuable investor in the cannabis space.
8. Btomorrow Ventures: Investing in the Future with an ESG Approach
Btomorrow Ventures invests in specialist categories, including consumer brands, digital transformation, new technologies, and future sciences, all guided by Environmental, Social, and Governance (ESG) criteria. As the corporate venture capital arm of BAT, Btomorrow combines the distribution power of a global corporation with the innovation of a start-up, making them a force to be reckoned with in the cannabis industry.
9. Gotham Green Partners: A Team with Unparalleled Cannabis Expertise
Gotham Green Partners leverages their intellectual capital, operating backgrounds, and deep network to invest in various cannabis subsectors and verticals. With a team that has senior investing experience at top institutional firms, Gotham Green Partners is well-positioned to be the preferred partner for operators across the cannabis space.
10. Ensemble: Building High-Quality Teams for Scalable Success
Ensemble VC is a modern, early-stage venture capital firm that focuses on helping founders build the highest quality teams as they scale. By providing support beyond just capital, ensemble aims to create an ecosystem of success for their portfolio companies. Their emphasis on team-building makes them a valuable partner in the cannabis industry.
11. GreenAxs Capital: A Wealth of Cannabis Industry Experience
GreenAxs Capital has been deeply involved in the cannabis industry since 2017. They have reviewed and analyzed hundreds of transactions, working with industry-leading companies on M&A initiatives and capital raises. Their expertise in the cannabis space positions them as a knowledgeable and strategic investor.
12. Delta Emerald Ventures: Combining Software and Expertise to Drive Value
Delta Emerald Ventures is a stage-agnostic private equity investor that combines proprietary software with cannabis market expertise to create value. By improving profitability and enhancing customer service, Delta Emerald Ventures helps cannabis operators thrive in a rapidly evolving industry.
13. CMPG: Expertise in Public Equity Markets of the U.S.
CMPG is an American investment management company that focuses on the public equity markets of the U.S. As an investor in the cannabis industry, CMPG brings a unique perspective and deep knowledge of the public markets, setting them apart from other venture capital investors.
14. L2 Ventures: Fueling Growth Investments in Cannabis
L2 Ventures is an investment firm specializing in growth investments in cannabis. With their focus on scaling businesses in the cannabis industry, L2 Ventures provides valuable support to entrepreneurs looking to take their companies to the next level.
15. Nosara Capital: Investing in Global Online Marketplaces
Nosara Capital is an investor with a global focus on online marketplaces. By identifying promising online marketplace opportunities around the world, Nosara Capital brings a unique perspective to the cannabis industry, offering valuable insights and expertise.
16. Entourage Effect Capital: Funding Companies Ahead of Federal Legalization
Entourage Effect Capital is a cannabis investment firm that invests in companies positioned to scale ahead of federal legalization. With a growth-stage focus, Entourage Effect Capital is deploying its fund to support companies in the cannabis space.
17. Startup Lisboa – Rocket Program: Empowering Entrepreneurs in Lisbon
Startup Lisboa is a business incubator that provides support to startups through mentoring, strategic partnerships, access to investment/funding, and a vibrant community. Their Rocket Program helps cannabis startups thrive by providing valuable resources and networking opportunities.
18. The Verleur Group: Incubating Startups for Profitable Success
The Verleur Group is a boutique venture capital firm that specializes in the hands-on incubation of startups. With a proven track record of success, The Verleur Group builds teams, products, and brands that generate profits. Their expertise in enterprise excellence makes them a valuable partner for cannabis entrepreneurs.
19. Acre Venture Partners: Nurturing Change in Food and Agriculture
Acre Venture Partners invests in companies that drive fundamental change in food and agriculture to address large-scale problems in human and environmental health. With a team of seasoned operators, entrepreneurs, and investors, Acre Venture Partners brings a wealth of knowledge and a helpful viewpoint to the cannabis industry.
20. Silverleaf Venture Partners: Guiding Growth with Integrity and Strategy
Silverleaf Venture Partners is an investment manager with a focus on developing success for portfolio companies through guidance, advocacy, and relationships. With a commitment to integrity and thoughtful strategy, Silverleaf Venture Partners seeks out management teams that share their values, positioning themselves as a valuable partner for cannabis entrepreneurs.
21. Mollitiam Capital: Cultivating Resilient Brands and Businesses
Mollitiam Capital is a U.S.-focused cannabis private equity fund that cultivates resilient brands and businesses. With a laser focus on the cannabis industry, Mollitiam Capital provides the necessary capital and guidance for companies to thrive in this rapidly evolving market.
22. Satori Investment Partners: Strategic Advice for Growth and Success
Satori Investment Partners is led by principals with extensive experience in building successful companies and multi-billion-dollar investment firms. Leveraging their valuable experience, Satori provides strategic advice to help their investments grow and succeed. Their expertise positions them as a trusted partner in the cannabis industry.
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7 Other Cannabis Venture Capital Investors to Consider
When it comes to the rapidly growing cannabis industry, venture capital investors play a crucial role in nurturing and expanding businesses. We will introduce you to 11 prominent venture capital investors who have made significant contributions to the cannabis sector. Let’s dive in and explore each of them further.
1. Entourage Effect Capital – Pioneering Investments in Cannabis
Entourage Effect Capital is a trailblazer in the cannabis industry, having invested over $200 million in more than 65 companies since 2014. Led by the experienced trio of Matt Hawkins, Andy Sturner, and Dov Szapiro, who collectively possess over 65 years of venture experience, Entourage Effect Capital is a force to be reckoned with. Their unwavering commitment to the cannabis industry sets them apart as one of the largest players in the field.
2. Lizada Capital – Seizing the Opportunities in Cannabis
Lizada Capital closely follows the legalization and opportunities surrounding cannabis. With investments ranging from $10,000 to $1 million in cannabis transactions, they are constantly on the lookout for promising ventures in the industry. Led by Steven Trenk, Lizada Capital sees the cannabis industry as one of the greatest opportunities of our generation, positioning itself to capitalize on its growth.
3. HALLEY Venture Partners – Focusing on Scalable Cannabis Technology
HALLEY Venture Partners has been at the forefront of the cannabis sector for the past five years. Led by Steve Schuman, who boasts over 17 years of private and public equity experience, HALLEY is heavily focused on the technology sector of cannabis. With a particular emphasis on highly scalable businesses, HALLEY Venture Partners seeks to drive innovation and growth in the industry.
4. Green Lion Partners – Elevating the Cannabis Industry’s Perception
Green Lion Partners aims to invest in early-stage ventures across the entire cannabis industry. Founded by Jeffrey Zucker and Michael Bologna, this Denver-based company is on a mission to “elevate public perception of the cannabis industry.” By backing promising startups, Green Lion Partners is determined to change the conversation surrounding cannabis and open up new avenues of opportunity.
5. Salveo Capital – Empowering Cannabis Entrepreneurs for Long-Term Success
Salveo Capital is committed to creating long-term cannabis companies and empowering the entrepreneurs who lead them. With Michael Gruber and Jeffrey Howard as managing partners, Salveo Capital brings extensive experience in early-stage investing, technology, finance, and agriculture. By providing both guidance and investment, Salveo Capital fosters the growth of cannabis-based firms.
6. Phyto Partners – Investing Beyond Capital
Phyto Partners is not just an investing firm; they provide so much more. Led by Larry Schnurmacher, Phyto Partners has invested in over 25 private cannabis businesses in the past five years. They focus on a wide range of cannabis-based businesses, including SaaS, Data, Biotech, Advertising, and more. Phyto Partners brings not only capital but also expertise and support to the more than 30 businesses in their portfolio.
7. Archytas Ventures – Investing in Strong Management Teams
With offices in New York and Los Angeles, Archytas Ventures is an influential player in the cannabis industry. Led by David Kivitz and Antony Radbod, Archytas Ventures invests between $1 million to $25 million in cannabis-focused companies. They have a track record of leading Series A, B, and C investments, with a focus on strong management teams and enterprises with solid cash flow and enterprise value.
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