- Insider identified the top firms investing the most money in cannabis startups in 2021.
- This is the fourth annual edition of our list.
- You can read the lists for 2018, 2019, and 2020 here.
While 2021 was a tough year for publicly traded cannabis companies, startups in the nascent industry — from software platforms to cannabis-infused-beverage companies — had a banner year for fundraising.
Last year, investors poured $2.7 billion across 272 deals into cannabis startups, up from $1.5 billion in 2020, according to the data provider PitchBook. Of that sum, over 85% went into US-based companies, a sign that investors are broadly focused on the US, even though cannabis isn’t yet federally legal.
Because of that, cannabis tech startups, which offer investors a way to bet on the spread of legalization without profiting directly from a controlled substance, tend to attract the highest-profile backers and the biggest rounds.
Oregon-based Dutchie, which helps connect cannabis shops to consumers in legal states, led the pack. The startup raised $550 million over two rounds this year, commanding a $3.75 billion valuation, among other monster funding rounds last year.
But the most active funds in the industry — the majority of which are represented on this year’s list — are set up specifically to invest in cannabis, and they don’t shy away from what’s known in industry parlance as “plant-touching” investments.
These firms, like Merida Capital Holdings, Poseidon Asset Management, Navy Capital, and others, tend to raise money from family offices or wealthy individuals so they are able to take risks that institutional firms, backed by large asset managers or pension funds, cannot.
To put together this list, Insider pulled data on 45 firms that invested in the cannabis industry last year. Of those, we generated a short list of firms that deployed over $10 million into private companies in the industry.
We cross-referenced the responses with the data providers PitchBook and CB Insights and asked the firms to provide breakdowns of their deals to ensure accuracy.
While the majority of these investments are equity-only, some firms included deals structured as convertible debt – a form of debt that converts to equity at an agreed-upon date.