It makes sense that investors, including venture capitalists, are investing more and more in the cannabis industry each and every year. More states and nations are moving towards legalizing medical and adult-use cannabis and it is easy to see that a lot of progress is being made in the United States and around the world. The U.S. Congress has already held a historic committee hearing on the benefits of legalization, the FDA is contemplating rules for CBD, and more cannabis-related hearings are coming soon. However, I don’t think that anyone could have predicted that more money would be invested from venture capitalists already in 2019 than what was invested all of last year. As Pitch Book reports, $1.6 billion has already poured in from VCs compared to $1.2 billion total in 2018:

Even though the use and possession of cannabis is illegal under federal law, 33 states and the District of Columbia have passed laws legalizing marijuana in some form. In June, Illinois became the 11th state in the US to legalize marijuana for recreational use. With every voting cycle, the stigma around marijuana seems to shed a bit more and VC interest in cannabis spikes at a phenomenal rate. And this year, which still has over five months to go, has already collected significantly more VC funding in the space than any year ever, according to PitchBook data:

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So far this year, Florida-based Phyto Partners boasts the largest portfolio with a total of nine deals. The early-stage VC was founded in 2015 and focuses on investments in the cannabis industry. Notable deals in 2019 include Green Flower, which operates a cannabis education platform and Wurk, the developer of a payroll and HR platform for marijuana businesses. The firm also holds a stake in Eaze, the provider of an on-demand marijuana delivery service; it was valued at $315 million in December. Gotham Green Partners, which is tied with  Arcadian Fund as the second most active investor in cannabis startups, participated in a $125 million round for Flow Kana in February. Founded in 2014, the business partners with small family farms to cultivate sun-grown cannabis flowers.

The cannabis market in the US is expected to grow at 24.1% over the next six years, again per Grand View Research. And while several cannabis companies such as Hexo (NYSE: HEXO) and CannTrust (NYSE: CTST) have been tumbling on the stock market in recent months, the possibility of innovative products and increased market size seem to make a compelling argument for VCs to cut hefty checks toward pot businesses. To put it bluntly: 2019 has been lit so far.

While there will certainly be ups and downs for the cannabis industry over the coming years, the future looks bright on a variety of political and business fronts. With Donald Trump pledging support for the STATES Act and all major Democratic presidential challengers supporting a form of legalization, the U.S. could legalize within the next few years, creating a domino effect across the world. There’s a solid saying to “follow the money” and if you follow the money of venture capitalists, smart money is on cannabis.

The International Cannabis Business Conference is the preeminent industry event to learn the latest about the cannabis industry and to network with top investors and entrepreneurs. Next up: Vancouver, British Columbia, Canada, this September 15-16. Purchase discounted early bird tickets by August 21st to save.