If you talk to enough cannabis founders right now, you'll hear the same thing: capital has dried up, investors have moved on, the window is closed. Seth Yakatan doesn't buy it.
On a recent episode of High Touch with Jake and Duffy, he pushed back on that narrative pretty directly. The money didn't disappear — it just stopped behaving the way it used to. And for operators trying to figure out how to finance their next move, that distinction actually matters a lot.
To understand where capital is today, you have to understand what happened in the last cycle. A wave of investors came into cannabis expecting it to behave something like tech — fast growth, big exits, patient timelines justified by the size of the opportunity. For many of them, it didn't work out that way.
"Unless you're really sophisticated… you're pretty much burned and you're playing for whatever you have left."
That kind of experience reshapes how people deploy capital. The three main pools Yakatan identifies — family offices and private individuals, equity funds, and private credit — are all still active, but they're asking harder questions, structuring deals more conservatively, and paying a lot more attention to downside protection than they were a few years ago. That's not capital disappearing. That's capital getting more disciplined.
The more interesting dynamic right now isn't the investors who left — it's the ones sitting on the sidelines. A significant amount of capital is in a wait-and-see posture, holding out for more regulatory clarity before making a move.
"Most of the capital is awaiting and they're either gonna be really happy or really disappointed."
The uncertainty around federal scheduling, hemp regulation, and what interstate commerce eventually looks like has made it genuinely hard to underwrite a bet. So a lot of potential investors are watching closely and not moving yet. That creates a strange situation where operators feel starved for capital and investors feel like they're being prudent, and both are kind of right.
If there's one event Yakatan thinks could meaningfully change the capital picture, it's access to public markets:
"The moment that you have the capability to list the first plant touching company on Nasdaq, walls are gonna fall down, and you're gonna see things that you've never seen before in the industry."
This isn't just about raising money. It's about legitimacy. Public listings would bring institutional investors into the space for the first time, create real liquidity for existing shareholders, and normalize cannabis as an asset class in a way that private markets simply can't do on their own. Right now cannabis operates in a mostly closed ecosystem. That's what keeps the ceiling where it is.
None of what's happening right now is particularly unusual if you've watched other industries go through similar transitions. Early markets are chaotic and capital is abundant. As they mature, capital gets selective. It doesn't go away — it becomes conditional. You have to earn it with cash flow, customer retention, and a clear picture of where the business is going.
Cannabis is moving into that phase. For operators who built real businesses during the hard years, that's actually good news. The next wave of capital won't just show up — it'll have options, and it'll go to the people who've already proven they can operate without it.