Canadian cannabis companies are on a fundraising spree. New York-based Viridian Capital Advisors has reported, that Canadian cannabis industry has got $2b as investment following the announcement of legalization processes.
The capital raised through 189 transactions will be used for cultivation, retail, and deal-making.
The capital exceeds by a significant margin than the US$937.4 million raised by the entire global legalized cannabis industry at this point of 2016.
Harrison Phillips, vice-president at Viridian said the adult use of Cannabis will exceed the medical market in next few years.
“While the medical market is expected to continue to grow over the next several years, the size of the coming adult-use market is expected to far exceed that of the medical side,”– he said.
The US$1.5775 billion raised in Canada also makes up more than half of the raised money tracked by Viridian this year in the legalized industry, which was a total of US$2.696 billion via 366 transactions.
“Companies have been raising significant amounts of capital, primarily to increase capacity to satisfy the coming surge in expected demand.” — he added.
Aurora Cannabis is pitching to more investors to capitalize the legal market.
In a recent note to his employees, Cam Battley, a senior executive at Aurora Cannabis said “we need to accelerate” mergers and acquisitions activity, because “we haven’t acquired any other companies in several hours.”
Aurora Cannabis bought three companies in 2 days last week in an effort become fully integrated, “globally dominant” player in production and retail.
“Additionally, companies have continued to invest in larger facilities with more advanced technologies (LED lighting and automation for cultivation, more scientific and precise equipment for extraction, etc.), leading to increases in the average raise sizes,” Phillips said.
President of a Seattle-based cannabis consulting firm, Dallas McMillan said – its high time for companies to woo the investors to get that competitive advantage.
“This means that in order for companies to compete they need to be large and efficient, and minimize overheads such as electricity and labor,” — McMillan wrote on Linkedin.