2021 is expected to be a banner year for the US cannabis market and this is a market that we are bullish on. Many analysts expect to see a changing of the guard this year as it relates to the companies that are considered to be industry leaders.
In the back half of 2020, several US multi-state operators (MSOs) reported quarterly financial results that exceeded expectations, and this is a trend that we expect to continue this year. When compared to Canadian Licensed Producers (LPs), US MSOs are ramping revenues at a much faster pace, and we expect this difference to become even more substantial this year.
One of the reasons we expect the US cannabis industry to record strong growth in 2021 is related to the opening of new recreational markets. Last year, Illinois and Michigan started to sell recreational cannabis to consumers and the revenue numbers that are being generated by these markets is impressive.
When compared to Canada, the US has more of a fragmented cannabis industry and the laws vary on a state level. In some states, there is a low limit on the number of necessary cannabis licenses that are being issued and this creates tough barriers to entry and will help prevent saturation over the long-term.
In 2021, we expect states on the east coast of the US market to play an important role in the growth of the cannabis industry. From Pennsylvania to Florida, there are a few large medical cannabis markets, and we are favorable on the potential for legal recreational cannabis in these markets. Although we do not expect recreational cannabis legislation to pass in Florida in the near-term, the state has been reporting impressive growth on the medical side of the industry and this is a trend to be aware of.
In 2020, consolidation was a major theme in the US cannabis industry, and this is a trend that we expect to become more significant on a going forward basis. Last year, we noticed a substantial increase in the amount merger and acquisition (M&A) activity and expect this is a trend that is expected to become more significant in 2021.
Innovative Industrial Properties, Inc. (IIPR: NYSE) has been one of the greatest beneficiaries of the growth of the US cannabis market. The company is the only cannabis focused real estate investment trust (REIT) to trade on the New York Stock Exchange and is one of the only cannabis companies that provides shareholders with a dividend.
From an acquisition standpoint, 2020 was a banner year for Innovative Industrial Properties and we expect the company to report strong revenue growth this year. Last year, the cannabis REIT acquired more than 15 properties and expanded on the relationships that it has with leading US cannabis retailers.
Last year, Innovative Industrial Properties was able to raise more than $500 million from leading broker-dealers on the secondary market and the stronger balance sheet fueled its acquisition spree. We expect the company to have no problem at raising additional capital and this is a trend that we are excited about.
Based on the bankers that are funding cannabis companies, we believe that Innovative Industrial Properties is considered to be less risky than MSOs. Most big US banks cannot work with large MSOs or any cannabis company that actually touches the plant due to cannabis still being considered to be illegal at the federal level.
Under a new White House administration, we expect the cannabis industry to take great strides in 2021 and believe that we are in the early innings of a multi-decade growth cycle. While many industries were negatively impacted by the COVID pandemic, cannabis companies recorded strong growth on average and this is a vertical that we are bullish on over the long-term.