Debt has taken a lead role in financing the Cultivation & Retail sector, accounting for nearly 77% of worldwide capital raised YTD, significantly higher than in any comparable period in history. The prevalence of debt is even higher in the U.S., accounting for over 94% of funds raised.

The rise in debt has a lot to do with the cratering of equity prices over the last year and a half, but it also has to do with a realization that the sector has become more credit-worthy. In 2018-2020, most companies were financed with convertible bonds, frequently with significant additional warrant coverage.

Several trends in cannabis debt financing are reversing:

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