VCs smoke last year’s record for cannabis funding (PitchBook).
By Priyamvada Mathur July 19, 2019
Venture capitalists seem to love the growing legal cannabis market and the lucrative opportunities that come with it. Last year set a colossal record of $1.2 billion of VC investment in the US toward cannabis startups, and 2019 has already crossed that mark by nearly half a billion dollars.
Even though the use and possession of cannabis is illegal under federal law, 33 states and the District of Columbia have passed laws legalizing marijuana in some form. In June, Illinois became the 11th state in the US to legalize marijuana for recreational use. With every voting cycle, the stigma around marijuana seems to shed a bit more and VC interest in cannabis spikes at a phenomenal rate. And this year, which still has over five months to go, has already collected significantly more VC funding in the space than any year ever, according to PitchBook data:
Despite hefty tax rates and complicated local regulations, more than 40% of the capital for cannabis startups this year has gone to companies headquartered in California. The Golden State was the first to legalize medical cannabis in 1996 and roughly twenty years later, it gave the green light to recreational marijuana, too. Now, it is home to some of the most valuable VC-backed cannabis businesses in the US, including PAX Labs and Eaze.