The state of the cannabis industry is an interesting one. Although millions of dollars are legally being generated, the industry is still competing with the public’s renegade outlaw perception of cannabis. While that may do a lot for sex appeal, it isn’t exactly the image you want when you’re trying to raise capital.
However, that perception may soon change, as venture capital firm Founders Fund has announced an investment deal with the cannabis private equity firm Privateer Holdings. Neither company will comment on the size of the deal, but according to Wired, it is being described as “a multimillion dollar investment.”
Although the majority of Privateer Holdings’ revenue is generated through medical marijuana, you may recognize some of its other business ventures. Privateer is the company that owns Leafly, described by Fast Company as the “Yelp of Weed,” as well as Marley Natural, the highly coveted Bob Marley marijuana brand that is set to roll out this year.
Founders Fund is the venture capital firm started by PayPal co-founder Peter Thiel. Under Thiel’s leadership, Founders Fund has been on the forefront of emerging trends. It was an early investor in Facebook and is currently invested in Spotify and Space X.
“Founders Fund is known for making some of the most lucrative and radically transformational investments of the past decade,” said Brendan Kennedy, CEO of Privateer Holdings, in statement. “With this investment they are signaling that they, like us, believe that the end of prohibition and the social harms it causes is inevitable.”
Although Thiel ruffled some feathers back in September over comments regarding how much cannabis Twitter’s team may be smoking, the move made by Founders Fund was not wholly unseen. In December 2014, Business Insider obtained documents revealing the venture capital firm’s interest and possible intentions of investing in Privateer Holdings.
In the narrow context of this story, Privateer has just gotten a leg up on the competition when it comes to cornering the cannabis market; in the broader context, something bigger is happening. With Founders Found casting its lot in with the cannabis industry, it is also bringing with it the weight of its portfolio. When an early investor of Facebook bets on an emerging market, people perk up and listen.