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Last quarter brought big news to the cannabis infrastructure, clean power infrastructure, and women’s health industries:
- In April, the US Drug Enforcement Agency (DEA) proposed to ease restrictions on marijuana.
- The US Preventive Services Taskforce revised guidelines for mammograms, recommending that women get screened for breast cancer every other year beginning at age 40.
- New data from organizations including Climate Analytics and BloombergNEF suggested that global CO2 emissions peaked in 2023 and will begin to fall this year, largely due to the rapid adoption of renewables and electric vehicles.
The Grata team dug into the top private equity (PE) trends that investors need to know in each of these industries. In case you missed them, here’s a roundup of all the juiciest insights from our Q2 PE Playbooks.
Cannabis Infrastructure
What you need to know:
Recreational marijuana is on the ballot in Florida this year.
Currently, marijuana is only legal for medical purposes in Florida. But recreational use is on the ballot in the third most-populated state, and it could open up a huge opportunity for investors if passed.
Logistics and production lead in revenue and growth.
The logistics & supply chain sector, which is responsible for legally manufacturing and transporting cannabis products, has exploded in the last year, with a mean annual revenue growth rate of 112%.
Production — which includes marijuana farms and growers, along with producers of cannabis products — sees $20B in revenue on average, and has grown by 18% in the last year.
Investing in dispensaries and banking/payments services could have dealmakers seeing green.
There are currently over 1,300 cannabis dispensaries in the US, and the vast majority of them are independently owned. This number will only increase as legal restrictions on marijuana ease. The cannabis distribution space has seen an average annual growth rate of 15% and has less than $1M in mean total capital raised — signaling an acquisition opportunity for dealmakers.
Discrepancies between federal and state laws make banking and payments services for cannabis companies tricky. Cracking the code is critical for cannabis distributors to really take off. There’s money to be made here — cannabis financial services companies currently bring in $28M in revenue on average and are seeing a mean growth rate of 20% per year.
Clean Power Infrastructure
What you need to know:
Rising demand for wind and solar make the installation & maintenance sector a safe bet.
Business is booming for the clean power installation & maintenance sector as more new solar and wind projects come online. Solar power generation in the US is projected to grow by 75% from 2023 to 2025. With demand steadily climbing, the sector sees some of the highest multiples in the clean power industry, with a 3.2x mean EV/REV and 14.6x EV/EBITDA.
Growing competition makes EV charging ripe for consolidation.
Charging infrastructure needs to catch up to support rising electric vehicle sales. Players in the space have struggled to compete with Tesla, but funding from President Biden’s 2021 infrastructure law is opening up the playing field.
Currently, there are over 2,500 privately owned EV charging companies in operation. As more competitors emerge, charging companies will likely want to purchase hardware and software from multiple sources to avoid pigeonholing themselves. Shell, for example, sources charging stations from ABB, Phihong, and Tritium.
Owning multiple EV charging companies could bring massive returns for investors.
Investors looking to take the lead in a more nascent space should turn to microgrids.
The $11.2B global microgrid market is expected to grow to $37.4B by 2032. Demand for microgrids will likely see strong growth in rural, remote areas in need of reliable power sources — especially as extreme weather events become more frequent and threaten to interrupt power generation.
Women’s Health
What you need to know:
Menstrual care is flourishing amid changing policies and growing awareness.
Eroding stigma around public discussion of menstrual health is increasing awareness and bringing in big business. The combination of growing e-commerce and new government policies are increasing access to feminine hygiene products and driving innovation in the space.
As a result, menstrual care companies have dominated M&A activity in the women’s health space with 37 transactions in the last year. And with women making up half of the world’s population, investors shouldn’t expect the flow to let up any time soon.
The contraception sector is ripe for acquisition.
Demand for contraceptive services has been steadily rising for the last 20 years, but some 215M women still lack access.
Investors have a massive opportunity to bridge the gap and make money in the process. Nearly 100% of the 10.5k companies in the contraception market are independently owned, and they currently see just under $3M in average annual revenue.
Low funding in menopause care presents an opportunity for dealmakers.
Menopause care is a historically underfunded space. However, as with menstrual care, awareness around the space is growing — and innovation is following suit. Menopause care companies have still raised little meaningful funding, but revenue in the space is growing at an average annual rate of 14.4%. The space should be a no-brainer for dealmakers looking to make moves in the women’s health industry.
Put the Playbooks Into Action
If you’re an investor interested in making moves in any of these spaces, 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.
