North American marijuana retailers and growers are leading the pack when it comes to raising capital over the past 12 months, but the industry as a whole has hit a very rough financial patch compared to a year ago.
Capital raises overall are down 61.2% year-over-year.
According to the Viridian Capital Advisors Deal Tracker, cannabis companies completed 177 capital fundraising deals for $2.58 billion in the past 12 months, which is down almost two-thirds from the same period in 2021-2022, when the industry raised $6.6 billion, Viridian reported.
Retailers and growers have outperformed their counterparts in other cannabis sectors when it comes to capital fundraising, with 65 completed raises for a total of $1.45 billion since Sept. 29, 2022.
But compared with the year prior, that’s down 49%, from 314 deals for the 12 months ended September 2022. During that period, marijuana shops and cultivators raised $3.4 billion, Viridian found.
By contrast, capital raises in the psychedelics sector over the past year – which came in second only to retail and cultivation in capital raises as of the end of September – are up by 77%, to 23 funding deals worth $427.4 million.
In third place was the biotech/pharma sector, which secured 31 raises for $143 million. Next was the hemp sector, which completed 11 financing deals for $142 million. Software and media hit 19 deals for $132 million, and after that, the investments and M&A sector raised $105 million from five capital raises.
Bringing up the rear were the cannabis real estate sector, with three raises for $79 million, consumption devices, which had six deals for $46 million, infused product makers, which raised only $21 million from 11 deals, ancillary companies, which had two raises for $13 million, and agriculture technology, with a single capital raise of $1.63 million.
Deals by Region
Where capital raises are happening right now isn’t much of a surprise, with California and New York leading the pack at 24 and 18, respectively. Florida, the next most active state, according to data from Viridian, saw nine capital raises for the 12 month period ended Sept. 29.
But there’s great disparity in the value of the raises, as well. Those 24 deals in California only brought in $325.1 million. By contrast, New York’s 33% fewer deals brought in 35% more cash at $439.1 million.
California also led in merger and acquisition activity over the past 12 months, with 19 closed in the period. That’s more than double the next more active state – Florida. (Full Story)