Capital Still Flowing Into Cannabis, But Only For Companies That Can Scale

Capital is available, but investors are no longer funding cannabis companies simply because they operate in the industry. That’s according to experts gathered at the MJ Unpacked cannabis conference held recently in Atlantic City, New Jersey, as reported by Green State.

So what are investors looking for?

Panelists sharing the stage during the “Ask the Investors” panel led by Patrick Rea, managing director of Poseidon Asset Management, agreed that scalability and operational discipline now matter more than growth stories alone.

Medical cannabis rescheduling is making a difference and is attracting more attention from outside investors. However, the majority of institutional investors and large corporations in the alcohol, tobacco, and pharmaceutical industries are still on the sidelines.

Jade Green, president of Next Titan Capital and founding partner at Key Investment Partners, holds that perspective.

“I still think we need a little bit more reform and a little bit more of the complexity to be solved on the compliance and on the supply chain side before we see those big guys come in,” Green said.

Until further progress is made on cannabis reform, cannabis businesses can take several steps to make themselves more attractive to investors.

Businesses need to understand what type of capital they are best suited for, whether to take on debt with high interest rates or opt for an equity partnership, Green explained.

“If your company has enough cash flow to service debt, that market is opening up,” she said.

Pete Karabas, founding partner at Key Investment Partners, said significant capital has already entered the sector over the past five years, but many investments have not generated meaningful returns.

He added that investors are prioritizing companies that can successfully replicate operations across multiple states.

As Karabas points out, investors are looking closely at consistent product quality, repeatable systems, and a proven ability to scale when determining where to deploy capital.

Carter Lewis, founder of Aquinnah Capital, said that having a strong exit strategy can also boost the prospects of a cannabis business seeking funds.

Taking acquisition potential into account early, rather than focusing solely on short-term growth, can make a difference, Lewis explained.

The message from investors is clear: capital is available, but expectations have changed. Those themes will take center stage at the Chicago Cannabis Capital Conference, June 14–16, where investors, operators, lenders, and advisors will discuss the strategies, metrics, and market dynamics shaping the industry’s next chapter. For companies seeking growth capital—or investors looking for the next opportunity—the https://events.igniteit.com/conversation is just getting started.