Cannabis and Big Business – Present and Future Partners
Previously associated with the War on Drugs, the cannabis industry slowly crept into the mainstream economy over the last few decades via grassroots political movements in scattered pockets across the country. What was once a trickling of change is now a rush of political and economic transformation that is now quietly being fueled by big business. Towards the end of 2021, Benzinga, a media and technology startup that seeks to empower a new generation of investors, hosted a Cannabis Capital Conference at the Marriot Marquis in Times Square here in Manhattan. Heavy-hitters from the cannabis industry such as Truelieve Cannabis Corp., Sundial Growers Inc. and Houseplant to name a few, mingled and networked with a host of large-scale VC firms and investment banks to discuss how far the industry has come and how much further it has to go.
There is much reason for excitement in the cannabis space these days, and mainstream events like the Benizinga Cannabis Conference work to highlight this cause for the growing enthusiasm. With support for legal marijuana at an all-time high, states with legal cannabis laws will generate $25 billion in sales in 2021, according to Vivien Azer, managing director and senior research analyst at Cowen, a provider of investment banking services and speaker at the Benzinga Cannabis Conference. In addition, despite Covid-19 disruption in the marketplace that has caused certain companies to report lower earnings in late July and August of 2021, Azer projects that by 2025, cannabis sales will nonetheless exceed $40 billion. Furthermore, supplemental to purely retail growth and on-the-ground expansion, the industry is continuing to attract investment capital with mergers and acquisitions expected to continue to accelerate according to Scott Greiper, president of New York-based Viridian Capital Advisors, another Benzinga Conference participant.
Keen on opportunity wherever it may arise, big business has already begun to capitalize on the industry as the stigma of cannabis use continues to fade into the mists of the past. Per Todd Harrison of CB1 Capital, as of 2020 Putnam Investments LLC, a Boston-based investment manager with more than $180 billion of assets under management, reported owning six million shares, or 5% of outstanding float, of 4Front Ventures, a U.S. based MSO; Wasatch Advisors Inc., a Utah-based asset manager, is one of the largest holders of Cresco Labs Inc. and an investor in Green Thumb Industries, both Chicago-based MSOs, while Fidelity Investments is an investor in Curaleaf, the Wakefield, Massachusetts-based MSO. With institutional capital already committed, what was once a fringe industry has quickly emerged into an economically stimulating catalyst for profit. Billions of dollars of institutional money are now being poured into the space every year. The cannabis economy is here to stay and there are numerous ways for interested investors to deploy their capital to get a piece.