Private market interest in North American cannabis investing has dissipated since its peak in 2018
Colorado-based cannabis-focused private equity firm Key Investment Partners (KEY) has launched a credit offering to provide senior secured loans to cash flow-positive businesses.
KEY also closed a credit facility with Illinois-based cannabis operator The Dispensary to fund retail footprint expansion and craft cultivation.
Since its inception in 2018, KEY has closed 14 North America cannabis deals across marketing, edibles, and agritech, according to Preqin Pro.
‘We believe the cannabis credit markets today are ripe for attractive investment, as capital in the sector remains limited while the expected rescheduling of cannabis dramatically improves the cash flow profile of our target borrowers,’ said KEY Founding Partner Pete Karabas.
September 5, 2024 (Preqin News) – Cannabis investing is a niche field within private market investing. In the 12 years since Colorado and Washington legalized cannabis, recreational usage has been permitted in 22 more states. The licit cannabis market in the US was estimated at $33.6bn in 2023 and is projected to grow at a CAGR of 12.1% to 2030, according to business consulting firm Grand View Research.
Aggregate deal value in North America peaked in 2018, reaching $5.7bn from 100 deals. However, private market interest in cannabis has recently dissipated, with just $0.1bn spent in nine deals this year.
Number of cannabis private market deals and aggregate deal value, 2018–2024 YTD
Source: Preqin Pro. Data as of September 2024
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