In November 2016, on the day when 6.5 Million Florida residents almost unanimously voted to expand the nascent medical marijuana program of the state, the San Felasco nurseries’ president reported in their financial filings that Gainesville growery had brought a new partner in.
For about $6.4 Million, a single investor purchased Class A shares of an undisclosed number in the business. The same day, Surterra Therapeutics associated firm, a Southwest Florida license holder, made their first of three equity sales, which totaled to about $10.3 Million.
These public filings just reflect a part of the total money that is flowing into the legal cannabis cultivators of Florida, but they offer a window into the eagerness that is preceding the upcoming boom with some predictions that the patient registry of the state would rise from 7,000 currently to about 500,000 when it is legalized. Almost all of the operators in the state have either recently raised money or are raising money. This would give the investors a chance to capitalize on an industry that is just beginning, but has a budding potential. It is also an uncertain and awkward timing for this.
During this money inflow, the lawmakers of the state are trying to craft parameters for this growing market, which includes the future competition framework in distribution, processing and cultivation. There is still no guarantee as to how much of the market investors are investing into and the transactions that are done with very little transparency are starting to fuel skepticism about the actual capacity and wherewithal of these companies that are supposedly going to carry the cannabis caseload of the state for the coming future.
Keeping medical aside, the potential for profit of this market is one of the largest drivers of interest surrounding the efforts of crafting new law for regulating Amendment 2, which allows the patients with acute conditions like PSD, epilepMarijuana Cultivators in Florida Capitalize Amidst Uncertain Market
sy, AIDS, and cancer to use cannabis.
The consumers spent about $6.7 billion last year on legal marijuana products, which are up by a third from 2015. The analysts project the Florida market to hit $1.3 Billion in the next four years.
But the maximum profits lie on the backend. Currently, there are tight restrictions due to which marijuana consumption in the state is not enough to push big organizations into the black. The cultivators of Florida are also saying that they are losing money. Some are even considering debt investments.
