After a tough year-and-a-half for the cannabis industry, the sector has found new momentum through increased pandemic-related sales and a raft of cannabis reform legislation in the US in the past few months.
Cannabis is considered an illegal Schedule I drug by the US federal government. Still, five states voted to legalize cannabis in November, and the House passed the MORE Act, a bill to federally decriminalize cannabis, earlier this month.
Cannabis will be legal for recreational use in 15 states once these laws go into effect, and medical marijuana will be legal in 36. The MORE Act is not expected to pass a Republican-controlled Senate, though the chamber is still up for grabs depending on the results of the January runoffs in Georgia.
Cannabis investors told Business Insider that it’s now easier to put together deals, since the field is less crowded and the companies left standing have management teams that successfully navigated the industry’s downturn.
While capital is still constrained in the once red-hot cannabis sector — at least compared to the highs of 2018 and early 2019 — this was the year that the frontrunners in the industry cleaned up their balance sheets and weaker players fell to the wayside.
The biggest venture deals in cannabis in 2020 were driven by cannabis tech startups like Dutchie’s $35 million Series B and LeafLink’s $40 million Series C, as well as by private cannabis retailer Ascend Wellness Holding’s $68 million raise.
To get a handle on the industry’s top dealmakers, we asked private market data provider Pitchbook for the top US-based investors in cannabis startups. We also reached out to the firms that appeared on our 2019 list.
In total, we contacted 25 funds to ask how much they invested in cannabis startups in 2020. Based on their answers, we narrowed down our list to 16 top players.
We asked the investors to confirm how much they invested, how many deals they did, and what trends they’re watching to place their next bets in 2021. The list is arranged by the amount of money each firm invested in cannabis startups.
Note: Many firms invest in both public and private companies. We asked each investment firm to estimate how much it invested in startups in 2020 only, rather than in public companies or as part of SPACs. We did our best to reflect these estimates and cross-referenced them with other sources. If you believe your firm should be included, please reach out to us at cannabis@businessinsider.com.
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