Stop the press! For the first time in history, an investment firm has publicly backed the marijuana industry. Founders Fund, the $2 billion San Francisco venture capital firm run by Silicon Valley super-stars including Peter Thiel, co-founder and former CEO of PayPal, is investing in Privateer Holdings, a marijuana company. For your information, Privateer Holdings owns several cannabis-related brands. Both companies declined to reveal the size of the investment, but described it as a ‘multi-million dollar’ participation in a $75 million fundraising effort by Privateer Holdings.
A multi-million dollar investment
Privateer Holdings, the cannabis industry’s first investment firm announced last week that they have received a multi-million dollar investment from Founders Fund. If you haven’t heard of Privateer Holdings before, let us remind you – this is the firm behind the recently launched Bob Marley marijuana brand. Yes, the family of Bob Marley, a guy who has over the years became synonym for cannabis culture, has finally started cashing in properly by joining a private equity firm to launch the first global consumer marijuana brand. The name of the brand is Marley Neutral and it comes with a promise of cultivating fine cannabis, true to Bob Marley’s ideals.
But that’s not the most important part of this article. The importance of this move by Founders Fund, headed by PayPal co-founder Thiel, marks the first time that a traditional investment firm has publicly backed the marginal marijuana industry. It’s part of a larger $75 million round that Privateer will soon close, which Business Insider reported would value Privateer at $425 million. Privateer declined to comment on that number.
Marijuana is growing up
This funding also shows the marijuana industry is evolving out of the black market, advancing towards the financial mainstream. As everyone is watching Colorado and Washington’s recreational marijuana industries blossom and begin to take shape, a large number of so-called ganjapreneurs are looking for ways to take cannabis mainstream and grab a piece of that pie. They all hope that soon, marijuana products will be widely available, just as alcohol and, in the same manner, socially acceptable.
“When we started raising capital at the very beginning, we knew that no venture firm would invest in this industry,” guys from Privateer Holdings said. “It was too premature for that to take place because of the stigmas associated. But with the election of 2012, with the first stores opening in Colorado and Washington this year, with the new states legalizing in the 2014 election, and a lot of other events last year that changed this industry as a whole.”
The money will be used for the growth of the three businesses currently operating under the Privateer Holdings umbrella: Tilray, an online medical marijuana distributor located in Canada; Leafly, a site for strain and dispensary reviews; and the newest addition, Marley Natural, a Manhattan based startup, which is supposed to begin selling a range of cannabis-related products later this year.
