Institutional investors, not just retail enthusiasts, are beginning to put their money into marijuana
Institutional investors are those entities such as banks, pensions and hedge funds, among others, who are able to invest large amounts of money into an industry. As opposed to retail investors, who might put in a couple hundred or thousand dollars, institutional investors go a long way to helping a company gain exposure and guarantee investor returns. When they enter a particular market, the market is seen as more “legitimate,” leading to even more substantial investments on both the institutional and the recreational levels. Now, it looks like marijuana is beginning to pick up its share of institutional investments.
This past September, Canopy Growth co-CEO Bruce Linton asserted that more institutional investments are coming to marijuana. He stated, “A big indication of the marijuana stocks two years ago and a year ago was it was all retail and now we are at a quarter or more institutional.” Canopy is traded on the New York Stock Exchange under the CGC ticker symbol.
The CEO of the Canadian Securities Exchange, Richard Carleton, agrees. He states that more companies are creating exchange listing deals that require deep-pocket investments. One example of this, according to Carleton, is Curaleaf, which recently attracted $391 million for its public launch. Carleton adds, “If we’re talking about the upper reaches of the US market, that’s still maybe not an enormous number but it’s hard to raise [$391] million dollars from a retail audience.”
Not everyone is so sure, however. Arcview Investor Group CEO Troy Dayton points out, “The big pension funds and big multi-billion dollar funds are not getting into the space yet.” He adds that there are certainly more checks being written to marijuana companies, but the size of the checks isn’t getting bigger – at least not yet. Dayton acknowledges that more institutional investments could be on their way, but it might take a couple of years.