Global Cannabis Market to Hit $42.7 Billion By 2024, According To Updated Report From Arcview Group, BDS Analytics

COLORADO: Legal cannabis sales grew 45.7% to $14.9 billion in 2019, led primarily by adult-use markets in Canada, California and Massachusetts, and supplemented by the unique approach to medical markets in Florida and Oklahoma, according to the “2020 Update to The State of Legal Cannabis Markets” (SOLCM) report released today from Arcview Market Research (“Arcview Group”) and BDS Analytics.

This worldwide growth estimate is on par with the forecast in the original SOLCM, released in June 2019, and reflects the highest annual growth rate to date. This new data is in stark contrast with the mere 17% growth seen in 2018, due in large part to the shrinkage in California following the launch of adult-use sales on January 1, 2018. As a result of expected growth in key adult-use markets in the U.S. and Canada, Arcview Group has updated their 2024 forecast to $42.7 billion in worldwide legal cannabis sales.

“The legal cannabis market grew by 46% in 2019 despite challenges caused by overregulation and overtaxing in the two biggest markets; California and Canada,” said Troy Dayton, Founder and Chief Strategy Officer of The Arcview Group. “That is a true testament to just how popular cannabis is among consumers and the ongoing impact of new markets coming online and maturing. The possibilities are boundless as political progress opens up more markets across the world, and struggling markets sort out their regulatory framework.”

“By loosening product restrictions and adopting a more free-market approach to licensing, Florida, for example, has started to realize the potential of medical cannabis sales in a populous state,” said Tom Adams, managing director and principal analyst at BDS Analytics. “However, what we’re seeing in Oklahoma is a light regulatory touch and low tax rates, which allows citizens to access the health benefits of cannabis, out-perform the illicit market, and create a healthy tax revenue stream directly to the state’s government.”

Other key trends analyzed in the 2020 Update to The State of Legal Cannabis Markets include:

  • Bustling activity in states such as Illinois, Maryland, and Oklahoma helped boost overall spending growth nationwide, which came out to $12.2 billion across the United States and an anticipated compound annual growth rate (CAGR) of 22.7%.
  • New licensed retailer openings in Ontario and other populous provinces have smoothed out supply chain kinks, creating a better product flow and ultimately improved sales in 2019. “Cannabis 2.0” also expanded product offerings beyond flower and oil in mid-December 2019, with limited impact on sales in 2019, but projected sales acceleration in 2020.
  • Legal medical cannabis spending beyond the U.S. and Canada more than doubled in 2019, from $367 million to $840 million, driven by Germany and Mexico’s markets.

The 55-plus page report is available free to all buyers of the $497 The State of Legal Cannabis Markets, 7th Edition, or as part of the Cannabis Intelligence Briefing Series subscription service from Arcview Market Research and BDS Analytics for $1,975.

Global Cannabis Sales Grow 48% To $15 Billion In 2019

COLORADO: Global cannabis sales rose 48% to $15 billion in 2019, driven by growth in sales in Canada and seven U.S. states that saw sales more than double.

Continued consumer adoption in maturing markets such as Colorado and new adult-use markets including Massachusetts contributed to 45% growth in adult-use sales to $8.9 billion. However, medical-only states and countries actually grew faster – up 54% growth to $6.2 billion. The United States saw 81% of spending in 2019, although superior growth in the rest of the world will continue balancing the market across the US, Canada, and Europe through 2024.

“These stunning growth numbers prove the negative stigma of cannabis is coming to an end in the US. What’s incredible is the realization that so much potential growth remains both domestically and globally,” said Troy Dayton, Founder and Chief Strategy Officer of The Arcview Group. “With sales jumping nearly 50% in an industry with only a handful of markets online, this report quantifies why there’s so much anticipation from producers and shrewd investors waiting for national and international markets to open up or mature. The fallout in public market valuations is not trending with the tremendous growth curve of this exploding market. That discrepancy represents a unique and time-bound opportunity for investors.”

Despite strong growth, regulatory challenges created headwinds that artificially hampered business activity in California, Canada, and numerous other markets.

“The disconnect between investor sentiment and the facts on the ground is as dramatic as anything I’ve seen since the dot.com stock crash of 2000, which happened just as the internet caught fire with consumers,” said Tom Adams, Editor-in-Chief of Arcview Market Research and Managing Director of BDS Analytics Industry Intelligence. “Five billion additional dollars were spent on legal cannabis in 2019. That’s bigger than the entire legal cannabis market was in 2015.”

Among the key points in the forecasts:

  • Sales in 2020 are forecast to increase by 38% driven by growth in established markets and continued geographic expansion, including Illinois’ recreational market opening;
  • Despite medical spending outgrowing adult-use spending in 2019, adult-use markets will be the primary drivers of global market growth through 2024;
  • More than $400 million in Massachusetts adult use sales in the first year of an adult use East Coast market;
  • Florida continues to perform strongly with over $650 million in sales despite being a medical-only market;
  • New consumers continue to enter the market at a rapid pace with the development of new products and social acceptance

For more information, please visit www.arcviewgroup.com and www.bdsanalytics.com

Altitude Investment Management Closes Cannabis Fund I at $30M

NYC Based Cannabis Investment Firm Successful Fund I Raise, looks to Fund II

NEW YORK: Altitude Investment Management announced that it will close Fund I on November 30, 2018 with $30 million raised. Fund I commenced March 1, 2018 and is currently invested in 16 companies which emphasize the fund’s focus on investing in a diverse range of early-stage to growth companies supporting the fast-growing legal global cannabis industry. Altitude is led by John Brecker, Jon Trauben, Michael Goldberg, and Roderick Stephan. Collectively, the partners have over 100 years of fund investment management experience and have managed investor capital in the alternative asset management space for the majority of their careers.

“Over the past year we have watched the global legal cannabis market grow, change, and begin to mature,” says partner John Brecker. “At Altitude, we believe in the long-term growth of the industry––our portfolio strategy rests on this premise and we are confident that the evolution of the legalized industry will continue to provide compelling global investment opportunities.”

As Fund I continues to deploy its capital throughout 2019, Altitude will be launching Fund II in Q1 2019. Fund II will continue Altitude’s focus on the ever-expanding growth opportunities within the global cannabis market with investments in companies that touch the plant as well as ancillary businesses supporting the industry. Altitude seeks to raise in excess of $100 million for Fund II.

Partner Michael Goldberg goes on to say, “As the cannabis industry matures, more companies will require significant growth capital to fund product, service and geographic expansion. In addition, increasing competition will create the need for consolidation, merger and acquisition and distressed investment opportunities. A larger capital base in Fund II will ideally position Altitude to take advantage of these opportunities.”

Fund I’s portfolio consists of some of the leading firms spanning the North American cannabis industry with concentrations in plant-touching operators/brands/distribution and non-plant-touching companies providing compliance, advertising/marketing, ag-tech and data solutions including:

  •  BDS Analytics, the leader in cannabis business intelligence.
  •  Canndescent, a leading California ultra-premium brand with world class management and best practices from consumer-packaged goods, advanced agriculture, and luxury lifestyle marketing.
  •  C4 Distro, a leader in the California cannabis distribution market that provides quality distribution services to California’s extremely fragmented market of suppliers and retailers.
  •  Enlighten, the leading in-dispensary digital marketing platform.
  •  Flowhub, a leading seed-to-sale compliance and robust point-of-sale SaaS platform in partnership with Hewlett Packard.
  •  Front Range Bio, an agricultural biotech company that specializes in tissue culture propagation of high value crops at industrial scale to improve reliability, efficiency, and safety.
  •  GrassRoots, a fully-licensed, vertically-integrated multi-state cannabis company active in cultivation, extraction, manufacturing, branding, and retailing.
  •  Loud Pack Farms, a leading California vertically-integrated cannabis consumer products company with a family of brands including Loudpack, Kingpen, Double Barrel and Honey Pot.
  •  PathogenDX, a provider of a patented DNA-based disruptive testing technology for state mandated microbial testing and environmental screening.
  •  Segra, a Canadian plant biotechnology company that specializes in industrial-scale plant micropropagation and plant genotyping services.
  •  Würk, which helps cannabis companies provide the necessary human resources and payroll infrastructure to manage their employee’s needs and to stay compliant with government regulations.

Partner Jon Trauben sums up Altitude’s Fund I strategy by saying: “Altitude focused on the industry as a whole – investing in the best management teams and business strategies of companies that will be foundational to this emerging industry. We sought reasonable valuation entry points taking advantage of early illiquidity and inefficiency due to the existing federal prohibition. As the cannabis market matures, Altitude believes that its portfolio companies will benefit from a rapidly growing global market, continued relaxation of prohibition, and the acceptance of cannabis as a medical, health and wellness, and adult-use recreational product.”

Ten New Investments In The Cannabis Space Look Attractive

By Jon Trauben, Altitude Investment Management

NEW YORK: Altitude Investment Partners, LP’s has made recent cannabis industry investments. During the period of March through August 2018, Altitude invested in ten companies: six of which were add-on investments to existing portfolio companies and four were investments in companies new to the Altitude portfolio.

The Altitude portfolio now consists of investments in 15 companies. The following is a summary of a selection of notable recent investments.

BDS ANALYTICS – Altitude made an add-on investment as co-lead in BDS Analytics’ Series B Preferred Stock $3.5 million capital raise. BDS is the leader in cannabis business intelligence.

This funding places BDS in a very strong position to execute the national expansion of its GreenEdgeTM software and to roll out its Consumer Insights & Industry Intelligence services to a much broader client base. Using the GreenEdgeTM sales tracking software, BDS Analytics is able to generate actionable insights pulled from hundreds of dispensary partners’ point-of-sale systems and closely study the behaviors and psychographics of cannabis users through its Consumer Insights Group. Its Industry Intelligence Services enables the company to make accurate market-wide financial projections and help the cannabis industry make better informed decisions. We are very impressed with the management team. Based on extensive experience in other industries, BDS Analytics has developed proprietary software and services that provide its clients with really useful data and insights. Its value is reflected in the rapid growth and diversification of the BDS Analytics client base.

CANNDESCENT – Altitude made an add-on investment in Canndescent’s Series C Convertible Note $13 million capital raise. Canndescent closed 2017 as the #1-selling brand of cannabis flower in California with its market-leading effects—Calm, Cruise, Create, Connect and Charge and is taking that success to the vape and ingestible categories. Canndescent is a leading modern cannabis company by combining world class management with best practices from consumer-packaged goods, advanced agriculture, and luxury lifestyle marketing. The company is commencing a multi western-state expansion strategy. We took a small position in Canndescent’s Series B Preferred Stock raise and have increased our investment significantly based on the milestones the company has achieved in such a short period of time.

GRASSROOTS CANNABIS (AES Compassionate Care PA and Grassroots Compass Ventures IL) – Altitude made separate investments in both AES Compassionate Care Pennsylvania and Grassroots Compass Ventures Illinois. Each are fully-licensed, vertically-integrated cannabis companies that are active in cultivation, extraction, manufacturing and retailing. Both companies are managed by the same management team. Our investments in multi-state vertically-integrated operators will allow us to participate in the growth and value creation as the medicinal markets grow, new patients are added, and new approvals for qualifying conditions increase the patient base. Additionally, large upside exists when a planned rollup takes place and as these states legalize adult use.

FLOWHUB – Altitude made an add-on investment in Flowhub’s Convertible Note $3.3 million capital raise. Setting a new standard for the highly regulated industry, Flowhub offers dispensary and cultivation license holders a metrcTM integrated platform built specifically to simplify compliance, with data automatically sent to state regulators via an API. Flowhub’s award-winning software serves more than 300 of the largest retailers and cultivators in the United States. Flowhub processes over $1B in cannabis sales annually and is the top cannabis compliance technology recommended by state agencies. Flowhub has successfully created software which meets the regulatory and compliance requirements of each state and also creates a sticky customer with recurring monthly revenues. We are excited by the accelerating growth of this company

C4 DISTRO (Golden Systems) – Altitude made a lead investment in Golden Systems’ Class B Preferred Units $5 million capital raise. Golden Systems owns C4 Distribution Co. (a.k.a C4 Distro), a California- licensed distribution operating company. C4 is poised to become a leader in the California cannabis distribution market. California needs companies to provide quality distribution services due to the extremely fragmented market of suppliers and retail dispensary buyers. C4 has most recently added four new brands for distribution to its growing list of products. With service to over 160 dispensaries in southern California, C4 is experiencing accelerating month-over-month growth by leveraging its high touch business model to build close relationships with its customers. The distributor plays a material role in the supply chain as well as in creating and growing brands. We believe C4 has the right management team to capitalize on this opportunity.

PATHOGEN DX – Altitude was the co-lead investor in PathogenDx’s Convertible Note $3.4 million capital raise. PathogenDx provides DNA-based disruptive testing technology and solutions to the cannabis, botanical, food, and agriculture markets at an adaptable scale for both large and small testing facilities. The company offers growers, processors, producers, consumers, and ancillary services real-time data and information pertaining to the quality of their product, ensuring a safer commodity and preventing millions of dollars in losses from contaminated or spoiled crops. PathogenDx’s testing kits identifies bacterial and fungal contaminants and reduces testing time down to hours from the traditional petri- dish method which takes days. The company is in an enviable position as it fulfills a central regulatory need with cutting edge science, while alleviating existing bottlenecks.


Jon Trauben is a partner at Altitude Investment Partners, LP, a US-based, global venture capital fund that invests in a range of early-stage to growth companies supporting the fast-growing legal global cannabis industry. The fund is managed by Altitude Investment Management, LLC, (the “Manager”), whose members have been actively investing in the cannabis industry and have successfully invested in the alternative investment space for years. The Manager provides institutional quality investment management experience to its investors. The fund continues to accept new investments and plans to close the fund to investors later this year. 

BDS Analytics Raises $3.5 Million In Series B

COLORADO:  BDS Analytics, a leading provider of cannabis market intelligence and consumer research, has raised $3.5 million in Series B funding in a round led by CanopyVentures and Altitude Investment Management, with participation from other leading investors, including Panther Opportunity Fund, and follow-on investments from several existing investors.

“We are very pleased to receive investments from such an illustrious group,” said Roy Bingham, CEO and Founder of BDS Analytics. “This funding places us in a very strong position to execute the national expansion of our GreenEdge software and to roll out our Consumer Insights and Industry Intelligence services to a much broader client base.”

“BDS Analytics graduated from our affiliated accelerator, CanopyBoulder, in 2015 and has since done an exceptional job positioning itself as a go-to source for industry data on market trends, brand development and consumer insights,” said Micah Tapman, Managing Director of CanopyVentures. “We are thrilled to help drive BDS Analytics’ incredible growth and look forward to continuing to work with the team to realize their many opportunities.”

“We are very impressed with the management team,” said John Brecker, Partner of Altitude Investment Management, LLC. “Based on extensive experience in other industries, BDS Analytics has developed proprietary software and services that provide its clients with really useful data and insights. Its value is reflected in the rapid growth and diversification of the BDS Analytics client base.”

Latest Arcview/BDS Data: Cannabis Consumer Spending Outpaces Industry Estimates

NEW YORK: Arcview Market Research reports that consumer spending on legal cannabis in North America is outpacing previous estimates. The report indicates that retail cannabis sales will grow 33% from 2016 to nearly $10 billion this year.

By 2021 the legal market is expected to reach $24.5 billion, at a 28% compound annual growth rate (CAGR). Arcview also reported that according to BDS Analytics’ GreenEdge point-of-sale tracking service, the medical market in California is already as big as the total markets in ColoradoWashington, and Oregon combined.

Tom Adams, Editor-in-Chief at Arcview Market Research and Principal Analyst at BDS Analytics explained, “Our data shows positive indicators across the board for the legal cannabis industry, in North America and around the globe… The passage of the 2016 ballot initiatives and continued maturation of the existing Adult-Use markets are the primary drivers of the growth this year.  That’s nothing compared to what we can expect in 2018 and beyond from Nevada’s tourism, and California and Canada planning to launch Adult-Use sales in 2018.”

Consumers Spend $53.3B On Legal, Medical & Illicit Marijuana Sales In North America

CALIFORNIA: Arcview Market Research, a leading publisher of cannabis market research, released its first ever estimate of the entire North American cannabis market, including legal, medical and illicit marijuana sales. The 5th edition of the State of Legal Marijuana Markets Report estimates consumers spent $53.3 billion on cannabis in 2016 across all markets.

This first of its kind report finds that legal regulated marijuana sales in North America totaled $6.9 billion in 2016, a 34 percent increase from 2015. Legal sales are projected to grow at a compound annual growth rate of 26 percent, from $6.9 billion in 2016 to an estimated $21.6 billion by 2021. The report also found that while all categories of legal cannabis products enjoyed healthy growth, the growth of alternative methods of consumption outpaced that of traditional flower sales, jumping, for example, from 30 percent of total legal sales in the first quarter of 2014 to 45 percent in the third quarter of 2016 in Colorado. The new legal market projections rely on a proprietary bottom-up point-of-sale foundation with millions of individual consumer transactions from dispensary partners in the largest legal cannabis markets across the country created by BDS Analytics.

An executive summary of the report was released at Arcview’s private Investor Forum in L.A. January 17th. The full 200+ page report will be released in a few weeks.

“The enormous amount of existing, if illicit, consumer spending sets cannabis apart from most other major consumer-market investment opportunities throughout history,” said Troy Dayton, CEO of Arcview Market Research. “In contrast to comparable markets with fast growth from zero to tens of billions in recent decades such as organic foods, home video, mobile, or the internet, the cannabis industry doesn’t need to create demand for a new product or innovation – it just needs to move demand for an already widely-popular product into legal channels.”

Other highlights of the executive summary include:

  • Including the illicit market, consumer spending on cannabis in North America amounted to an estimated $53.3 billion in 2016, 87 percent of it still outside legal channels despite erosion of the illicit market in adult-use states. That was down from 90 percent of sales in 2015;
  • Advances in legalization after four new adult-use markets (California, Massachusetts, Nevada and Maine) become active by 2018 will erode the illicit trade further, down to 67 percent of the market in 2021;
  • Colorado’s illicit market has seen the steepest decline in percentage of overall sales
  • In states that have not legalized even medical sales however, illicit market operators thrive on the “illegality premium” built into prices there with no competition from legal operators;
  • In Q1 2014 when adult-use launched in Colorado, over 70 percent of legal sales came from dried flower; in Q3 2016, it was less than 55 percent. In contrast, concentrate sales were $20 million in Q1 2014, or 13 percent of sales. By Q3 of 2016 they had quadrupled to $80 million, and 22 percent of sales;
  • By Q3 2016, Washington legal sales were already 21 percent concentrates, 9 percent edibles and 10 percent pre-rolled marijuana cigarettes, with flower accounting for only 59 percent. In Oregon where concentrates and edibles were only allowed for the first time in the adult-use channel in July 2016, the transformation in category and brand sales was almost overnight.

“This is the most dynamic market I have analyzed since the early days of the Internet in the 1990s,” said Tom Adams, Arcview Market Research’s new Editor-in-Chief. “Just one example: a huge surge in private equity investment in 2014 and 2015 helped drive the number of brands with concentrates in Colorado stores from 465 to 975 in one year. The largest brand grew its sales 84 percent in the first nine months of 2016, but several competitors posted triple digit growth rates such that it barely held on to its share of the market in a very crowded field.”