Debra Borchardt
Despite the dire situation in California and criticism of the New York adult-use market launch, investor money continues to flow into those states.
As of June 2, Viridian Capital Advisors reported that in the last 12 months California led in the total number of investments with 28 total raises, and it still posts up at third place with $294 million in invested capital.
New York snagged a healthy second place showing with 14 transactions and $418 million in capital deployed.
Illinois took the number one spot in total invested capital with $451.08 million through just five transactions. Capital raises in the state though are off 64% from this time in 2022.
Other than Arizona, most states experienced dramatic declines in capital raises. Arizona saw nine transactions in the last 12 months versus just one at the same time in 2022 – making an 800% increase. However, it was just $100 million, putting the state in seventh place.
Viridian noted that cannabis capital raises are off to a multiyear low. Only $1 billion closed through the first 20 weeks of the year compared to $2.4 billion last year. Not surprisingly, debt represented 61.1% of total capital raised. Viridian wrote that this is significantly higher than in any other comparable period since 2018.
Public companies have raised only 66.9% of total capital year-to-date, down from 78.1% last year.
M&A
California also topped the list for M&A transactions. The beleaguered state ranked number one in total transaction volume by state with 19 completed transactions for the 12 months ended June 2. Florida ranked second with 10 total deals, and Colorado’s transaction volume following behind with seven deals and total M&A consideration at $228.7 million versus Florida’s $271.63 million total M&A.
M&A activity was also down dramatically from this same time period in 2022 for most states except Florida and Texas. The Lone Star state recorded three deals for this time period versus one in the previous 12 month measurement.
Viridian wrote that there have been 53 transactions totaling $904 million year-to-date versus 93 transactions for $3.6 billion last year. The 2023 YTD average transaction size of $17 million is the lowest in recent years.
