Sector Spotlight: Cannabis Cultivation

The global cannabis industry is growing like a weed. With more countries and states legalizing recreational marijuana and adopting medical cannabis for treating chronic diseases, the cultivation market is expected to be worth $1.84T by 2030.

For private market dealmakers who are willing to navigate a unique set of challenges — mainly, regulatory inconsistencies across geographical markets — cannabis cultivation could yield a lot of green.

Here’s what to know about the sector.

Green Fields in the Cannabis Cultivation Space

Source: Grata

Cannabis cultivation companies account for just 2.5% of the broader cannabis infrastructure industry, but that doesn’t mean there’s a dearth of opportunity for dealmakers.  

The overwhelming majority of companies in the cultivation sector are privately owned and ripe for acquisition.

What’s Fertilizing the Cannabis Cultivation Market

Source: Grata

Though cannabis infrastructure companies generally see fairly high revenue, profitability continues to be an issue for many due to:

• Inconsistent regulations

• High taxes

• Intense competition in an increasingly crowded market

• Limited access to traditional banking services

• A robust illicit market

Still, global demand for cannabis products continues to rise, driving growth across the entire cannabis supply chain.  

Dealmakers could find opportunities to establish themselves as leaders in the cultivation sector. Cultivation is the second-smallest market in the broader cannabis infrastructure industry, and its average revenue is modest compared to its peers. However, cannabis cultivation companies are seeing consistent growth, and they have raised little notable capital.

Targeting cultivation businesses in areas where marijuana legalization is relatively new could give dealmakers an added advantage, as fewer licenses and less competition could lead to higher profits.

Who's Winning in Cannabis Cultivation

The Grata team has curated a list of top private companies in the cannabis cultivation sector. These companies have been selected based on their revenue and employee headcount compared to the industry averages.

Source: Grata

Grata users can see and save the full list here.

Take Action with Grata

If you’re a private market dealmaker looking to make moves in the cannabis cultivation space, Grata can help you put the insights in this article into action.

From in-depth market research to sourcing to pipeline management and relationship nurturing, Grata’s end-to-end dealmaking platform streamlines your workflows so that you can close more deals.

Schedule a demo today to get started.