CBD and THC: green light for investment

Image of a cannabis plant
Image by Roberto Valdivia

A recent article in Bloomberg News instantly grabbed my attention.  Joe Montana, quarterback extraordinaire and football icon, now a venture capitalist, just participated in a $75 million funding for a company that sells marijuana products in stores throughout California.  Taking a risk on a controversial investment, Joe is positioned to win in an industry which he hopes can make a “serious impact on opiod use or addiction”.  In fact, cannabis related products could help football players or others in high impact, injury prone professions. This industry includes growers and retailers as well as medical and recreational products.

Like Joe, investors seem sweet on cannabis derived products that provide health and wellness benefits. But where is this industry headed as a business investment? How great is the risk? What are the opportunities? the library has a number of resources that can help to answer these questions.

Image from IBISWorld show key statistics and industry snapshot for Cannabis.

IBISWorld provides industry analysis for the U.S. and China. If often includes emerging or niche industries such as cannabis production and sales. According to IBISWorld, annual growth for producers is forecast to grow 21% between 2018-2023. Reports detail industry performance, products and markets, competitive landscape and operating conditions.

Pitchbook is a private equity and venture capital database with in depth information and statistics on companies, deals and investors.  Each person needs to create a personal account based on an active Penn email address. Monthly download limits apply for private company information. A search for cannabis in Verticals pulls up an overview of investments in this industry

Graph from Pitchbook showing an overview of Investment dollars from 2010-2019 for Cannabis by investment type
Image of CB Insight intelligence reports for cannabis. Show variety of titles of reports.

Similar to Pitchbook, CB Insights provides information about public and private companies, investors and industry trends. Pitchbook and CB Insights are excellent sources of company information especially for small private start ups. Search by keyword: cannabis. Then select from the tabs at the top of the screen from CB Intelligence, Companies, Investors and News. The image above shows the types of materials available under the tab.  CB Insights also provides “Collections” of start-ups in a particular industry, including one for Cannabis Startups. This helps to identify competitors, allies and opportunities.

Image of a Company Profile from CB Insights

Company profiles include an overview, financials (if available) and transactions. Links to appropriate “collections” appear beneath the profile.

Thomson One (only accessible using Internet Explorer) provides company overviews for publicly traded companies, deals and funding as well as analyst reports (companies and industries).  Search for public companies like Aurora Cannabis, Canopy Growth Corporation or Cronos Croup and view market data, financials, ownership, investors, and analyst reports.

In addition to company information you can also search for industry reports by clicking on the Screening & Analysis tab at the top of the screen and then clicking on Research.  You can search by a company or search for keywords in the Title or Text. By searching for Cannabis in the Title I found that several large firms such as Jefferies, Cowen and Company and Canaccord Genuity are publishing weekly or monthly reports that track the industry.  AltaCorp Capital Inc. included this graphic of the Cannabis Industry Value Chain.

Image of the Cannabis Industry Value Chain from cultivation to retail. Source: AltaCorp Capital Inc.

BCC Research includes global market research reports. Trends, players and forecasts are provided. Their North American E-cigarette and Legal Cannabis Markets report was just released in March 2019. The scope of the report considers the revenues associated with the sale of e-cigarettes and legal cannabis throughout the region and considers the revenues that are associated with the cost of such products.

BCCGraph

 

This chart shows the forecasted growth of the cannabis market from 2017-2023

Passport GMID covers consumer goods and consumer behavior. It is international in scope. A keyword search for cannabis results in several market research reports focused on the disruptor effect of cannabis on other industries.

A recent report from CB Insights entitled “Cannabis For…..Everything? 23 Industries Seizing the $32B Market Opportunity” shows how cannabis is pushing into and disrupting many markets.

Seems like Joe is onto a winning strategy.

1 thought on “CBD and THC: green light for investment

  1. Pingback: Adaptogen and Cannabis: Recipes for Stress Relief | Datapoints: A blog from the Lippincott Library of the Wharton School of Business

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