Cannabis: An Emerging Market for RegA+

by | Wednesday October 27, 2021
Cannabis: An Emerging Market for RegA+

Despite remaining illegal at the federal level, the idea of legalizing cannabis is continuing to gain public acceptance, especially in recent years. As of April 2021, 35 states have made medical marijuana legal, with 18 of them legalizing it recreationally. This growth has been tremendous, raising the industry’s value to over $13 billion and directly supporting 340,000 jobs. As of 2019, 67% of Americans believe that regulators should legalize marijuana, an astounding 20% increase from a decade ago.

These factors have created an excellent opportunity for companies in this space. As public perceptions continue to rise, investments in cannabis companies may become more attractive to retail and accredited investors. In 2019, cannabis companies received nearly $117 billion in investments, displaying some of the investors’ significant interest in the space. Opportunities will only continue to increase as the industry progresses. Projections show that by 2028, cannabis will be an industry worth $70.8 billion globally. In the US alone, cannabis sales in the US in 2021 alone are predicted to reach $21 billion. 

The combination of investor interest and industry valuation could mean that raising capital through exemptions like Regulation A+ could prove to be an incredible opportunity for companies and investors alike. Already, many cannabis companies are seeing success through these opportunities. Early this year, Gage Cannabis closed their Regulation A+ offering after securing $50 million in funding and adding 1,000 shareholders to their cap table. This one success is not an outlier, as other issuers have been seeing success as well. 

It will be interesting to see how the industry and investment opportunities within cannabis will expand with the upward trend of public perception. Additionally, as more states continue to legalize, more businesses will emerge, jobs will form, and investors will invest in an emerging market.

Along with our partners, KoreConX hosted a webinar on why RegA+ may be the perfect fit for companies in the cannabis space. If you missed the live event or want to rewatch it, visit our YouTube channel to access the full recording of the event. If you would like to contact any of our speakers or view the full schedule, please visit our KoreSummit site.

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