- Cannabis capital raises are down 65% YTD. Equity financing has been particularly hard hit and is off by 77%. Investors have generally adopted a risk-off posture throughout the market, particularly toward growth-oriented investments like cannabis. Meanwhile, cannabis managements have understandably pulled back from equity issuance due to the tremendous uncertainty regarding legalization and stock price levels they believe are below intrinsic value.
- The Cultivation & Retail sector has been one of the most effected. Equity financing is down nearly 96%, and U.S. Equity financing has virtually disappeared from the market.
- Investors remember the capital crunch year of 2020 vividly, but YTD 2022 is even worse. Accordingly, we believe investors should take a close look at the liquidity of the companies in which they have invested.
