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While the lack of federal legalization has made some investors hesitant to add cannabis companies to their portfolios, Intrinsic Capital Partners sees that as one of the things that makes the cannabis investment space so attractive. It’s a hyper-growth market, projected to grow at a compound annual growth rate (CAGR) of 26.5% over the next decade. Still, because it’s not federally legal, most traditional sources of capital and strategics haven’t felt comfortable entering the space yet.
There’s significant demand from cannabis companies that need capital to grow, but the supply of traditional capital has been slow to increase enough to meet that demand. However, this creates a unique opportunity for cannabis-focused investors looking for high-growth opportunities that otherwise could be hard to find in a fully legalized market.
Investors Might Change Strategy to Take Advantage of Pre-Legalization Cannabis Markets
A lot of investors in the space right now are spreading their bets around and counting on the organic growth of the market to deliver their returns. However, many may not be bringing a lot of operational expertise or directly partnering with the companies in their portfolios to really help them build and grow.
That hands-off approach of spreading capital across a large number of companies might not be the best way to …