Cannabis Industry

Capital Imbalances Offer Opportunities In Cannabis

Though long considered an illicit substance, cannabis is on the cusp of social and legal acceptance—both domestically and internationally. According to a report by Grandview Research, that dramatic shift is set to create a global legal market with an estimated total sales of $66.3 billion USD by 2025 (up from $11.9 billion USD in 2018). But while there has been an explosion of capital raised from cannabis companies, there remains a mismatch between cannabis companies seeking capital and their potential investors. This capital imbalance creates opportunities for savvy investors.

Volatility and inevitable market corrections are partly to blame, but ultimately, the mismatch between capital demand and supply is due to a limited universe of investors, lack of credit availability from traditional banks, and an undeveloped payments systems. However, with the impending shift in the regulatory climate, one thing is certain: this soon-to-be-corrected capital inefficiency points towards a strong potential market opportunity in the cannabis space.

This is evidenced by the expanding universe of investors starting to look at this space.

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Cannabis Industry Infographic

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