TLDR:
- Cannabis funding has significantly decreased in recent years, with the decline starting earlier and being particularly steep compared to other sectors.
- Despite consumer interest in cannabis products, investments in cannabis startups, including those focusing on CBD, have slowed down.
While many sectors have seen a decrease in investments, the cannabis industry has experienced a significant decline in funding over the past few years. The article highlights that cannabis funding peaked about five years ago and has since been fluctuating, mostly on the downward trend. The decline in cannabis dealmaking started earlier compared to other sectors and has been particularly steep.
The most heavily funded companies in the cannabis space have mostly not raised fresh funding in years. Startup investors are hopeful for growth opportunities if the U.S. government moves to legalize marijuana, as many states have already loosened restrictions. However, despite consumer interest in cannabis products like edibles and vaping, investments in cannabis startups, including those focusing on CBD, have slowed down significantly. Many companies tied to CBD picked up multimillion-dollar rounds in the past five years but have not raised new financing in recent years.
While there is a sense that political winds are blowing in a direction favorable to cannabis legalization or decriminalization, cannabis investors continue to face challenges in achieving enviable venture capital returns. The article underscores that investments in the cannabis industry, once seen as promising, have left backers largely burned.
