A new study from a large market research and big data analytics firm has found that the vast majority of investors are now open to opportunities in the legal cannabis market. The report states that 68 percent of investors are interested in both businesses that physically touch cannabis and ancillary businesses that do not touch the product. New Frontier Data partnered with Arcview Market Research and The Arcview Investor Network and released the 2016 Cannabis Investment Study.
“It is notable to see investors’ appetite is now broadening beyond just ancillary services where there has been less stigma and risk attached in the past. With the cannabis industry forecasted to grow at a compounded annual rate of 29% over the next four years, making it one of the fastest growing industries in the U.S., investors are now open to exploring any opportunity in the sector whether it touches the plant or not,” the report said.
As far as specific verticals in the cannabis industry, the report states that investors are mostly still interested in ancillary commercial products. About 62 percent of investors said they would prefer putting their money in ancillary companies. This is likely due to the vast amounts of confusing regulations and continued illegality of the cannabis plant at the federal level. Almost half, or 46 percent, of the investors surveyed said they were interested in non-flower products, most likely due to the recent rise in popularity of edibles and concentrates. Even though cultivation facilities are seen as higher-risk investments, 38 percent said they’d still consider it. Investments in industrial equipment, hemp, consulting services, and so on were also of interest. While opportunities in those sectors might be more limited than the others, cannabis professionals are constantly learning the skills and specialized expertise required for these spaces. Next year’s report should see a rise in these as well.
“The Arcview Investor Network is, by far, the largest single source of deal flow in the fastest growing industry in America and the largest single group of investors placing capital in the sector. We were honored to be the focus of the first ever deep-dive study on actual investor’s attitudes and actions so far. There are many interesting insights in this report that could have far reaching impacts for entrepreneurs raising capital and other investors considering placing bets in this sector,” said Arcview Group CEO Troy Dayton.
The report also stated that 65 percent of investors made their first investment in 2014 or later. An impressive 71 percent said they expect to invest more this year than they did the previous year, and so on as time progresses. The two most popular state markets, according to these investors, are California and Colorado. This report contains some huge news that will only continue to help solidify cannabis as a legitimate commodity and reduce the age-old stigma attached to the plant medicine.