The cannabis world continues to expand, mostly with small steps...but positive steps nonetheless. This is especially true for publicly held companies in the marijuana space. That’s what I learned at the Viridian Capital cannabis investor conference today here in New York, where I gave a talk on how Regulation A+ IPOs could now be great for cannabis companies. Here are some interesting stats I recently learned:
- Cannabis is now a $3 billion industry and growing (pun intended).
- Nine more states are voting this November on expanding legal cannabis.
- There are 150 public cannabis companies (50 are in Canada).
- Public cannabis companies raised about $400 million in 2015, another $250 million was raised by private companies in the industry.
- More than a dozen companies have cleared SEC registration and some have begun uplisting.
- Viridian’s cannabis index was down 32% in 2015 because the industry needed some correction, many see this as a positive following a difficult to explain bubble in prior years.
- Liquidity is still a challenge for public cannabis companies since institutions are still mostly staying away, leaving mostly expensive, “toxic” debt investments to provide capital.
- Too many public companies still have bad management, limited financial controls, poor liquidity in trading and challenges in banking, but some of this is sorting itself out.
- Key sectors in the public markets are agtech, biotech, consumption devices, cultivation and retail, and physical security
- More banks are accepting cannabis cash but it is still a real challenge for many.
- The first “grower” is now publicly trading following a recent acquisition, and the first IPO of a grower has been approved by the SEC (through a Regulation A+ offering!) – this is big, as until now, public companies have been limited to “ancillary” businesses that do not, as they say in the industry, touch the plant.
As more and more states permit medical or recreational cannabis use, we get closer to the possibility of federal action to remove marijuana from the Schedule I drug list, which could change just about everything very, very quickly. Stay tuned!