The once shunned cannabis sector now offers attractive PE opportunities in many jurisdictions.

By Stuart Alford QC, Tom D. Evans, Eveline Van Keymeulen, Elizabeth Richards, David J. Walker, and Catherine Campbell

In years gone by, the prospect of significant PE investment in the cannabis industry would have been unthinkable for many. However, regulatory and legal developments have created opportunities for medical cannabis businesses and legalised new non-medical cannabis applications in many jurisdictions. According to Pitchbook, buyout firms invested US$3.54 billion into the cannabis sector in 2021 across 223 transactions, showing significant appetite for deals. PE firms now have scope to embrace growing medical and consumer interest in certain jurisdictions, while in others, such as the US, evolving legal restrictions continue to challenge investors.