Cannabis Industry Raised $1 Billion Last Year, Has Peaked

The cannabis industry appears to have hit peak growth already. Not that that's a bad thing: It still pulled in a tidy billion dollars in industry investments.

Here's the lowdown on how well the cannabis industry is doing alongside how well it used to be doing.

How That $1 Billion Breaks Down

The report, from Veridian Capital Advisors, tracked 304 capital raises across 2016, totaling $1.09 billion. Here's the summary:

“They include 239 public companies raising $836.1 million. Private capital raised by 65 companies totaled $255.8 million.

Companies in North America raised the bulk of the capital, including many in Canada, where medical marijuana is legal nationally and Prime Minister Justin Trudeau has made national legalization of recreational marijuana a goal of his administration.”

Naturally, large chunks of that total amount came from the largest deals, which throw off the average.

Why Cannabis Already Peaked

So who's saying that the cannabis industry is raising less? Those looking farther back at the data from prior to 2016. The industry already peaked back at the end of 2015, according to analysis from Geek Time:

“The true peak of activity was in Q4 2015 when 32 deals produced $71 million in money changing hands. The last quarter of 2016 can be called somewhat of a recovery with 25 deals following three straight quarters ending with fewer deals than the last.”

So, despite fundraising holding fairly strong across 2016, it's still down overall since the year before, setting 2017 up to deliver on one of Tech.Co's predictions for the tech world in 2017: Cannabis startups will begin stabilizing into a clear pecking order.

Image: Wikimedia

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Written by:
Adam is a writer at Tech.co and has worked as a tech writer, blogger and copy editor for more than a decade. He was a Forbes Contributor on the publishing industry, for which he was named a Digital Book World 2018 award finalist. His work has appeared in publications including Popular Mechanics and IDG Connect, and his art history book on 1970s sci-fi, 'Worlds Beyond Time,' is out from Abrams Books in July 2023. In the meantime, he's hunting down the latest news on VPNs, POS systems, and the future of tech.
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