When New York became the 15th state to legalize recreational cannabis on March 31, 2021, it opened one of the largest cannabis markets globally. Not surprisingly, the state’s capital raises and M&A activity in the cannabis space have meteorically accelerated following the legislature’s legalization of adult-use cannabis.

Gov. Andrew Cuomo signed into law the New York State Marijuana Regulation and Taxation Act (MRTA) to legalize recreational use of marijuana for adults over the age of 21, although the recreational market in New York will take longer to bloom. The state’s timeline for opening recreational cannabis dispensaries was originally expected to take at least 18 months, but this projection may be further delayed due to an apparent legislative impasse over who should lead the new Office of Cannabis Management and the Cannabis Control Board, which were created under the MRTA to regulate New York’s legal cannabis industry.

Nonetheless, the enthusiasm of the capital markets cannot be contained. A recent graph from Viridian Capital Advisors tracks year-to-date capital raises and M&A deals with New York-based companies as either acquirers or targets:

As noted by Viridian, both capital raises and M&A transactions have skyrocketed to record levels since New York legalized recreational cannabis earlier this year.

Clearly, the capital markets are bullish on the prospect of a legal cannabis market in New York. We can expect significant capital to continue to be deployed with legal sales in New York on the horizon.