Venture Capital in the Carolinas: Who is Funding Plant Medicine?

The Carolinas are at a turning point as views on cannabis and psychedelic plant medicine continue to change. State laws remain strict, but interest from investors is growing. Venture capital and private funding are starting to open doors for startups and research in this field.

This article looks at who is investing in plant medicine, how regional capital markets are changing, and what investors and entrepreneurs should understand in 2026.

Why Venture Capital Matters for Plant Medicine?

The cannabis and psychedelics industries both require large amounts of capital. Developing new medical treatments or commercial products takes funding for research, regulatory approval, growing or manufacturing facilities, and distribution.

Across the U.S., psychedelic startups raised more than $520 million in 2022. Most of that money went into research, clinical trials, and supporting technology. However, cannabis is still mostly illegal at the state level in the Carolinas, and psychedelic research is only starting to draw attention from public and private investors.

The VC Ecosystem in the Carolinas

The Carolinas are not yet widely known for investing in plant medicine, but their venture capital scene is growing quickly. 

A Growing Life Sciences and Startup Infrastructure

Both North Carolina and South Carolina have seen strong growth in venture capital, especially in the life sciences sector.

• North Carolina’s life sciences sector saw major growth in 2024. The state attracted more than $10.8 billion in manufacturing and research investments, strengthening its position as a hub for biotech and medical innovation.

• The Research Triangle (Raleigh–Durham–Chapel Hill) is becoming a key center for biotech investment. Local funds, incubators, and startups are drawing in capital. As laws and research pathways open, some of this investment could pour into the field of plant medicine.

Even though this funding is not aimed directly at cannabis or psychedelics, it builds venture capital networks that plant medicine companies can later use.

Local Venture Capital Programs Supporting Innovation

The NC Venture Capital Program (NCInvest) is a statewide program in the state of North Carolina to introduce more startup funding in industries at an earlier stage. This program, which is funded through the allocation of about 30 million dollars, involves VC partners to fund promising businesses, including those operating in the biotech or wellness areas that may one day incorporate plant medicines.

The Medical University of South Carolina (MUSC) is starting venture funds that are expected to increase innovation funding in South Carolina, amounting to about 30 million dollars for health-related startups. Although this is not a fund dedicated to plant medicine, it helps finance health and biotech firms, which provide an investment base that plant medicine projects may draw on in the future.

Regional VC Firms and Networks

Several venture capital firms in the Southeast offer funding opportunities that plant medicine startups could potentially access:

• VentureSouth is active throughout the Southeast, providing funding to early-stage startups and supporting networks of founders and investment syndicates.

• Local startup resources highlight active VC firms in South Carolina and North Carolina, like IDEA Fund Partners, that support innovation. These firms could become important for plant medicine startups as legal and regulatory conditions develop.

These regional networks help companies secure early-stage funding, even if they are not yet investing directly in cannabis or psychedelic products.

National Cannabis & Psychedelic VC Activity

Even though the Carolinas are still limited legally, national venture capital is active in plant medicine. These investments can signal trends and potential partners for startups in the region.

Cannabis Venture Capital

Across the U.S., venture capital firms investing in cannabis include Entourage Effect Capital, Gotham Green Partners, Casa Verde Capital, and others. They provide funding for cultivation, technology, compliance, and distribution.

Some firms focus exclusively on cannabis and related services. For example, Ghost Management Group has been funding early-stage cannabis ventures since 2012.

While most cannabis VC activity happens in states with legal markets, entrepreneurs in the Carolinas can still attract attention if they develop products or services that could scale nationally or enter legal markets.

Psychedelic Medicine Investment

Psychedelic therapeutics are also drawing significant venture capital nationally. Companies like Beckley Psytech have raised tens of millions to fund clinical research on psilocybin therapies for conditions such as depression and chronic headaches, supported by healthcare and VC investors.

Innovation in tools, clinical platforms, and biotech for psychedelics could provide opportunities for Carolina startups to form partnerships or attract outside investment, especially if state policies change.

Legal and Policy Factors Driving Investment Interest

Regional Cannabis Laws

Cannabis remains illegal for both medical and recreational use in North Carolina and South Carolina, even as lawmakers continue to debate reform. By 2026, however, 39 U.S. states have legalized medical marijuana.

In Western North Carolina, the Eastern Band of Cherokee Indians began adult-use cannabis sales on tribal land in 2024. This is one of the only legal cannabis markets in the region.

This uneven legal landscape limits direct local investment. Still, it does not prevent out-of-state venture capital firms from funding legal activities such as research, technology platforms, or brands operating in compliant markets elsewhere.

Psychedelic Research Movement

North Carolina lawmakers have reviewed bills that would fund research into psilocybin and MDMA. This shows growing interest in psychedelic medicine at the state level.

Other reports also note discussions about expanding access to psychedelic treatments and creating task forces to study their medical potential.

These signals matter to investors. When governments support research and explore clear rules, investors feel more confident. Clear policy paths make it easier for capital to move into new medical and biotech markets.

Challenges and Opportunities

In this section, we will shed some light on the challenges and opportunities for Carolina Plant Medicine Startups.

Challenges

1. Strict laws around cannabis and psychedelics make local venture capital investment harder in the Carolinas.

2. Many investors avoid markets where the rules are unclear or restrictive. As a result, national cannabis and psychedelic firms often put their money into companies based in states or countries where these substances are legal, instead of investing directly in Carolina-based businesses.

Opportunities

1. Carolina startups can leverage regional life sciences funding and biotech infrastructure to build ventures that grow beyond the local legal limits.

2. By partnering with national VC firms and research institutions, plant medicine startups have potential to secure investment tied to research, clinical validation, or technology platforms rather than direct cultivation or sales.

What to Watch for in 2026?

Policy reforms and venture capital interest are aligning nationwide, and the Carolinas could become more attractive to plant medicine investors if:

1. Clear medical cannabis laws are passed, reducing legal risk and opening regulated markets.

2. Psychedelic research programs receive public funding or formal state approval.

3. Regulatory pathways are defined for clinical trials, manufacturing, and patient access.

4. University and hospital partnerships expand research and commercialization efforts.

5. Federal rescheduling or guidance lowers barriers for cannabis and psychedelic investment.

Conclusion

Venture capital in the Carolinas is not yet a major center for cannabis and psychedelics. Still, strong life sciences ecosystems, new local funding programs, and national investment trends suggest growing opportunity. Entrepreneurs who understand regulations, use existing biotech networks, and connect with specialized investors are more likely to raise capital as this space continues to develop.