Article by David George-Cosh, BNN Bloomberg
Canada may be the first developed country to legalize cannabis, but the country lags far behind the U.S. when it comes to growing a robust marijuana startup industry.
Globally, 125 venture and private equity investments were made in the cannabis sector since the first quarter of 2013 to the second quarter of this year, according to data provider Refinitiv. Of those investments, 97 were toward U.S. companies, the data shows.
“Opportunity is everywhere, but what’s important is to identify where a market is in its cycle. If you ask me where Canada is, I’d say it’s in the eighth inning,” said Matthew Nordgren, managing director of the Arcadian Fund, a Los Angeles-based venture capital firm, in a phone interview.
The total amount of investments in cannabis startups is more than US$1.48 billion globally, 92 per cent of which were earmarked toward U.S.-based firms, according to Refinitiv. Only about US$98 million was invested in Canadian companies.
That pool of global venture capital should substantially increase in the next year with firms looking to raise increasingly more funds, such as Measure 8 Venture Partners LP – an early investor in Curaleaf Holdings Inc. – raising US$100 million in financing.
But Canada – despite being the home of dozens of cannabis producers thanks to government policies that allowed for large- scale cultivation facilities across the country – may continue to be left out in the dust. Although production is now assured in Canada, it’s unlikely that the country’s next-stage of cannabis companies can take advantage of venture financing, several VCs told BNN Bloomberg.