"I think the impact we will see coming out of Washington, D.C., is fewer investors coming into the space ... fewer people launching businesses direct to the plant — cultivation, dispensing and manufacturing. That's where you're going to see people not wanting to enter the cannabis space," she says.
To date, the growth within the industry is undeniable, with marijuana legalized for recreational use in eight states and Washington, D.C., and for medicinal use in 30 states and Washington, D.C., per Marijuana Business Daily.
Projections vary among industry analysts, but the numbers are substantial. Marijuana Business Daily predicts retail sales will hit $6.1 billion for 2017 and the industry could have a maximum economic impact of some $68.4 billion by 2021; GreenWave Advisors predicts $7.7 billion for 2017 and $30 billion by 2021 if recreational and medicinal cannabis is legalized nationwide.
Capital has also flooded into the space — nearly $1 billion from 2012 through 2016, according to GreenWave Advisors, citing data from Pitchbook. What's more, Marijuana Business Daily finds that investors report plans to increase the size of their investments this year. The average investor or firm involved in the industry has put around $450,000 in cannabis companies to date, with each investment coming in around $100,000. But this year, they plan to invest around $500,000 on average in marijuana businesses.
"The Trump Administration has not yet changed our strategy, because there's been a lot of rhetoric but not a lot of action," says Patrick Rea, CEO and co-founder of Boulder, Colorado-based Canopy Accelerator, an investment fund for early stage cannabis companies. It has invested over $6.5 million since early 2015 in more than 64 companies.
"A lot of investors are becoming more aware that they have an impact on what the administration might decide or not decide to do based on how they present themselves as a business-friendly environment, creating jobs and having positive effects on society," Rea says.
Investors such as Emily Paxhia are also closely watching developments out of Washington as they strike new deals. Paxhia is managing director at San Francisco-based Poseidon Asset Management, which has a fund dedicated entirely to investing in the cannabis space. Since January 2014, the fund has invested nearly $20 million into 30 cannabis companies.
"We take everything that is happening from the top down in the regulatory environment very seriously," says Paxhia. "We are not sure what the administration is going to do. ... It makes us really think carefully about the types of investments we are placing and whether or not it stays in the United States or moves abroad."