With $4 billion in Capital, Cannabis Industry Is Growing

The cannabis industry is growing in more ways than one. In the first half of 2018, public and private cannabis companies have raised $4 billion, an over 200% increase from the year before. The trend toward consolidation has made a small, select number of companies into formidable forces in the rapidly expanding marketplace.

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Among this small collection of highly successful companies are a number of SaaS businesses that are poised to marry the software and cannabis markets in interesting new ways. At the forefront of the Cannabis SaaS movement is TILT Holdings, a company which is comprised of 4 smaller entities: Brite Side, Baker Technologies, Sea Hunter Therapeutics and Sante Veritas Holdings.

TILT is a vertically integrated technology and infrastructure platform which aims to provide solutions to the cannabis industry. Baker Technology’s software allows the company to provide solutions that cater to dispensaries and care centers throughout the United States. The company also helps to build infrastructure and provide financing for those interested in starting their own cannabis businesses.

Though gains appear to be strong for TILT and others, there are still a number of roadblocks standing in the way of unimpeded growth.

Cannabis companies in the United States currently have issues accessing conventional finance or conducting banking due to federal statutes that prohibit the sale or use of the drug. As many American companies deal with legal hurdles, their Canadian counterparts are moving aggressively to fill the void. Aurora Cannabis recently acquired MedReleaf for an industry-record $2.3 billion in a blockbuster deal that was just one of many M&A deals for the fledgling cannabis industry.

Though larger multinational companies have typically avoided investing in an industry that many still deem too risky, Constellation Brands is one notable exception. The company that owns subsidiaries Modelo and Corona has been steadily investing more funds in Canopy Growth. Most recently, Constellation purchased $3.45 billion. Analysts predict that the conglomerate will soon purchase Canopy outright in a deal which could mark a major turning point for the industry.

For now, the jury is still out, but the evidence looks stronger every day that something powerful is growing in the cannabis industry.