In 2017, the legal cannabis market was worth an estimated $8.3 billion and is projected to grow at a compound annual growth rate (CAGR) of 14.7%, to reach almost $25 billion by 2025. The medical market is projected to grow at 11.8% CAGR through 2025, growing from $5.1 billion in 2017 to an estimated $12.5 billion in 2025. During the same period, adult use sales are projected to grow at a 18.4% CAGR, from $3.2 billion to $12.5 billion (through projections based on the markets having passed medical and adult use legalization initiatives as of January 2018, but not including assumptions for additional states which may yet pass legalization measures before 2025).* Giadha Aguirre De Carcer, New Frontier Data CEO and Founder.
Our Investment Selection Process
- None of our transactions are or will be the same, due to the type of capital invested, state laws governing investment criteria and long term viability of the opportunity.
- As such, our 360 approach to investing encompasses legal, regulatory, experience of management and anticipated financial returns before we deploy our investors’ capital.
- We look for companies that have a competitive advantage, technological breakthrough or intellectual property that will make them a leader in the space.
- We also look for techniques and procedures that will be difficult to copy. By investing in the strongest start-up companies, we are confident that as the industry grows, so will our investment.
- We focus on groups with solid management teams in place when considering any company for investment. Doing the proper due diligence on the owners and directors of the company provides significant information. Years in the industry, education, criminal records are all things to be considered.
33 states and the District of Columbia currently have passed laws broadly legalizing cannabis in some form. A number of states have also decriminalized the possession of small amounts of cannabis.
- The District of Columbia and 10 states — Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington — have adopted the most expansive laws legalizing cannabis for recreational use.
- Most recently, Michigan voters approved a ballot measure permitting adults age 21 and over to purchase and possess recreational-use cannabis.
- The United States, while not federally legal, is the center of the adult-use world. (40% of the market is in California alone!)
- Canada became the first G7 nation to legalize Adult Use Cannabis in 2018
- Medical cannabis is legal in 33 U.S. states and the District of Columbia.
- Some medical cannabis laws are broader than others, with types of medical conditions that allow for treatment varying from state to state. Louisiana, West Virginia and a few other states allow only for cannabis-infused products, such as oils or pills. Other states have passed narrow laws allowing residents to possess cannabis only if they suffer from select medical illnesses.
- 12 countries have legalized medical cannabis: Australia, Argentina, Brazil, Canada, Chile, Columbia, Germany, Israel, Mexico, the Netherlands, South Africa and Uruguay – with more on the way.