2021 seems to be the year of cannabis, as its prospects and apparent societal acceptance have dramatically changed since the industry’s early days. How are investors navigating this complex and ever-shifting landscape as we sit on the verge of federal legalization?
A team of expert investors gathered to discuss their strategies at the Benzinga Virtual Cannabis Capital Conference:
- Emily Paxhia, Managing Director at Poseidon Asset Management
- John T. Lykouretzos, CEO of FocusGrowth Asset Management
- Sean Stiefel CEO and founder of Navy Capital
- Todd Harrison founding partner and Chief Investment Officer at CB1 Capital
What Is Driving Investor Interest Back Into Cannabis?
According to Viridian Capital Advisors, the first five months of 2021 saw more than $6.6 billion in deals in the cannabis industry, versus just $2.3 billion for the first five months of 2020.
Emily Paxhia, managing director at Poseidon Asset Management, thinks this upward trend is due in large part to companies finally proving their business models.
“Specifically in the U.S., MSOs are demonstrating incredible growth with great EBITDA margins. I think the business case is there, so institutional capital is seeing it more as a consumer category, which instead of its own siloed little basket is now part of a high growth consumer space,” Paxhia said.
Sean Stiefel, CEO and founder of Navy Capital, said the shifting political power balance is another reason behind the industry’s new-found excitement.
The November election and Georgia Senate runoffs caused the flood gates to reopen for the cannabis space, in his view.
“We are in a favorable political landscape, theoretically, and that’s why the capital came in,” …