Finance / Cannabis

Study Finds Most Investors Comfortable With Businesses That 'Touch' Marijuana

Growing public acceptance of marijuana, highlighted by a slew of successful legalization initiatives, is encouraging investment.
Study Finds Most Investors Comfortable With Businesses That 'Touch' Marijuana
Image credit: joshuaraineyphotography | Getty Images
Guest Writer
Easy Search. Quality Finds. Your partner and digital portal for the cannabis community.
3 min read
Opinions expressed by Green Entrepreneur contributors are their own.

Investors interested in getting into the cannabis market have become more comfortable with the idea of putting their money into businesses that "touch" marijuana, a new study has found.

The 2016 Cannabis Investment Study, conducted by New Frontier Data and Arcview Market Research, found that 68 percent of investors have become interested in investing either in companies that directly grow and sell marijuana or ancillary businesses that do not directly deal with cannabis.

The former is considered businesses that “touch marijuana,” while the latter does not.

“It is notable to see investors' appetite is now broadening beyond just ancillary services where there has been less stigma and risk attached in the past,” New Frontier Data CEO Gladha DeCarcer said in a statement.

Related: 10 Cannabis Startups You Need to Watch

“With the cannabis industry forecasted to grow at a compounded annual rate of 29 percent over the next four years, making it one of the fastest growing industries in the U.S., investors are now open to exploring any opportunity in the sector whether it touches the plant or not."

New Frontier Data specializes in analytics and big data associated with the marijuana business, while Arcview is a cannabis market research company.

Related: How to Grow a Cannabis Farming Business in the Blazing Marijuana Economy

Key findings.

According to information from New Frontier Data and Arcview Market Research, the report included a number of key findings about the changing landscape of marijuana industry investment. They include:

  • 71 percent of investors expect to invest more in the cannabis industry in 2016 than they did last year.
  • Nine out of 10 investors have interest in medical and adult use markets.
  • Only 36 percent have interest in CBD markets.
  • The states drawing the biggest interest from investors are California (57 percent) and Colorado (37 percent).
  • When considering the global market, 64 percent of investors voiced interest in the Canadian cannabis market.

Most of those surveyed said preferred stock (76 percent) and convertible debt (73 percent) are their favorite investment choices. Public stocks ranked last.

Related: The 411 on 4 Smoking Hot Marijuana Startups

Areas of investor interest.

While acceptance grows among investors for companies that touch marijuana, the report also shows the favorite area for investors (62 percent of those surveyed) remains ancillary commercial products. That covers a wide range of products, from companies that provide security to insurance providers, accountants and vaporizer companies.

About 46 percent have interest in non-flower products, such as edibles and marijuana-infused beverages.

The third most popular choice is cultivation facilities (38 percent). The report noted these facilities are especially popular investments in markets that limit the number of grower licenses. That area could prove more of interest as California company Innovative Industrial Properties, a REIT that invests in growing facilities, is seeking to become the first publicly traded marijuana company on the New York Stock Exchange.

The full report from New Frontier Data and Arcview Market Research can be downloaded from the company sites. The cost is $399.

By Javier Hasse
From retailers to growers, producers, and suppliers, there’s a seemingly never-ending list of startup opportunities in this emerging market. In Start Your Own Cannabis Business, marijuana, biotech, and entrepreneurship reporter Javier Hasse introduces forward-thinking entrepreneurs like you to the industry and shares hard-earned tips and success stories from pioneers and visionaries in the marijuana industry.
Learn More

Latest on Green Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to Queue next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to Queue next to any article to save to your queue.

Podcasts episodes coming soon for GreenEntrepreneur.com

There are no Podcasts in your queue.

Click on the Add to Queue next to any podcast episode on Entrepreneur.com to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

Entrepreneur Media, Inc. values your privacy. In order to understand how people use our site generally, and to create more valuable experiences for you, we may collect data about your use of this site (both directly and through our partners). The table below describes in more detail the data being collected. By giving your consent below, you are agreeing to the use of that data. For more information on our data policies, please visit our Cookie Policy.

Name Category
Google Ad Serving, Ad Targeting, Analytics/Measurement, Optimisation
Rubicon Ad Serving
Teads Ad Serving
Nativo Ad Serving
Teads Ad Serving
New Relic Analytics/Measurement
Log Entries Analytics/Measurement
Sailthru Content Customization