Report: Marijuana Entrepreneurs Raised $1 Billion In 2016

2016 was a banner year all around for marijuana. Legalization cleaned up at the ballot box, and entrepreneurs cleaned up with their investors, according to a new report.

Marijuana businesses around the world secured more than $1 billion in funding this year, according to a new report from Viridian Capital Advisors, a cannabis-specific financial advisory firm. Forbes picked up on the report, noting that nearly all of the investment activity was here in North America—on both sides of the U.S.-Canadian border.

Most investors, Viridian told Forbes, come from the real-estate sector—which historically has been the safest place to park cannabis-friendly capital. It works like this: dispensaries and grow operations need places to operate, and landlords have always been leery to rent to operations breaking federal law. Those that do, charge a premium—a bet that’s proven wise and paid off in spades.

So now there’s more money for the forward-thinking fellows to burn. Where’s all this money going, exactly?

In the six weeks since Election Day, there’s been a flurry of investment activity in certain U.S. states, as capitalists seeking to cash in on the surefire bet that’s the green rush fall over each other in a mad dash to get in before it’s too late. But the bulk of the billion was sunk into companies that do not, and will not ever, deal with the cannabis plant itself.

$500 million alone was invested in British pharma giant G.W. Pharmaceuticals, Forbes noted. The publicly-traded company has long been a darling with everyday investors, with its stock catapulting from $36 in March to $134 in November, growth fueled by the company’s continuing success with clinical trials of its cannabinoid-derived medicines for epilepsy. With that kind of potential and proven value, nabbing institutional investors with the wherewithal to sink in a half-billion was a cinch.

The second-biggest individual haul was for “Innovative Industrial Properties,” the first marijuana-related company to earn a listing on the New York Stock Exchange. The company, which buys and leases real estate that can then be used for cannabis cultivation operations, had a bummer of an IPO—producing the appropriate exhausted puns from the creative minds at CNN—but there’s nonetheless clear value in weed-friendly real estate, as the demand for grow space in Denver and other cities has demonstrated.

Investors are also trucking money to Canada, the only country on the planet where a federal government is licensing medical-marijuana operations. Some of those federally licensed firms are publicly traded, and their value is likely to grow further when Prime Minister Justin Trudeau legalizes recreational marijuana this spring as he has promised.

Since Election Day, however, when voters in four U.S. states approved recreational cannabis legalization measures, the “deal flow” has been domestic, and in two specific states.

According to Scott Greiper, Viridian’s founder and president, investment capital is pouring into cannabis companies in California and Massachusetts, the two most-populous states where legalization is now law of the land. Here we go again with the coastal elites.

And as for Donald Trump and his weed-hating Attorney General nominee, Jeff Sessions? Investors don’t care. Viridian notes that there’s been no slowdown in dealmaking since Sessions’ nomination was announced.

Related: 5 ‘Shark Tank’ Stars Give Advice on Investing in the Pot Industry

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