In the United States, debt raises amounted to $5.3 billion, up from $1.6 billion in 2020. Consequently, equity raises are a less attractive vehicle for raising investment, at least at the moment. The more significant trend in 2021 was debt raises, which allowed companies to take advantage of lower interest rates on their loans. As sagging share prices dilute existing shareholders, equity raises have become a last resort for companies in need of cash. GreenWave Advisors, which provides financial research and consulting services to the cannabis industry, counted twenty-two cannabis SPACs seeking a total of about $3.9 billion in October 2021 alone.
Raising investment has always been one of the most challenging aspects of doing business in cannabis. Large banks continue to be wary of lending money to companies selling a federally illegal drug, but as the industry evolves and matures, companies are finding new and more creative ways to fund their operations—and slowly but surely convincing bigger lenders to play ball. In 2021, the industry saw an unprecedented influx of cash as more banks and institutional investors started working with the industry, offering loans at lower rates than ever before.
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