Companies doing business in the marijuana industry raised $13.8 billion in merger and acquisition (M&A)  and other investment deals in 2018. The total is nearly four times higher than the 2017 total of $3.5 billion.

More than 300 deals were completed in 2018, compared to 153 in 2017, according to cannabis industry research firm Viridian Capital Advisors. The average capital raise among publicly traded cannabis firms was $26.1 million, including both equity and debt. Among privately held companies, the average deal raised $18.3 million, including $20.4 million in equity and $10.7 million in debt.

Public companies raised $9.8 billion in new capital last year. More than 40% of the fresh cash came from Constellation Brands Inc. (NYSE: STZ), with its $4 billion investment in Canopy Growth Corp. (NYSE: CGC). Other large deals announced in December added about the same amount to the annual total. In all, cannabis firms that operate as growers and retail distributors accounted for more than $8 billion in new investment last year.

Because adult use of marijuana and other marijuana-derived products is now legal in Canada and because Canada is right next door to the United States, where eight states, including California, now allow legal sales of marijuana, investors see demand rising and that requires more growers. And if the U.S. federal law is eventually changed to make marijuana legal in all 50 states, the demand for cannabis will soar.

Cannabis-infused edibles and beverages remain a relatively small market currently, but large consumer products companies like Constellation are looking for ways to sell these to a wider audience as non-alcoholic wellness products. Tobacco giant Altria Group Inc. (NYSE: MO) invested in grower Cronos Group Inc. (NASDAQ: CRON) and e-cigarette maker Juul at the same time last month. With cigarette sales dropping, Altria is placing a significant bet on a change to federal law that will open a potentially gigantic U.S. market.

Whether 2019 will be a continuation of investment in the cannabis industry by other established food and beverage makers remains to be seen, but we do know that Coca-Cola Co. (NYSE: KO) is looking around for an investment, and Molson Coors Brewing Co. (NYSE: TAP) has invested in Canada’s Hexo and AB InBev S.A. (NYSE: BUD) has struck a product development deal with Tilray Inc. (NASDAQ: TLRY). Canopy Growth, Cronos, Hexo and Tilray are among the largest companies in the cannabis sector, but others remain that could be in line for a jolt of new investment this year.

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