Peter Thiel’s VC firm invests millions into legal pot industry

Peter Thiel has likely become the first top-tier VC to invest millions into pot.

Thiel, through his San Francisco venture-capital firm Founders Fund, has invested several millions into Privateer Holdings, a private equity firm that is propping up the legal cannabis industry. The investment is part of a larger $75 million Series B — its largest round yet — which Business Insider reports will value Privateer at $425 million.

Founded in 2011, Seattle-based Privateer invests in Tilray, medical cannabis distributor in Canada; cannabis information company Leafly; and Bob Marley’s namesake pot company, Marley Natural. The firm is run by CEO Brendan Kennedy, who has a background in software and startups, and is trying to build a family of globally recognized and legal pot companies, validated by investments from Privateer.

According to Wired, Privateer operates a 60,000-square-foot federally licensed facility in Canada, where it grows cannabis for Tilray’s 4,000 customers. This year, Tilray is on track to generate $25 million in online orders. Leafly, meanwhile, has about 4 million monthly users and is slated to bring in $12 million in ad revenue this year. With the Marley family, Privateer has a lucrative royalty agreement.

Thiel, a billionaire entrepreneur and investor, who earned his fortune as a co-founder of PayPal and early Facebook investor, is an influential libertarian who has publicly advocated for legalizing marijuana, among other issues. He has given millions of his self-made fortune to Libertarian and Republican candidates, and become involved in the campaign to legalize gay marriage.

After publicly criticizing Twitter last year as a horribly mismanaged company with a lot of pot-smokers, Thiel clarified his position in a later interview by saying: “You could smoke a lot of pot and still have a great company, if the business model is as robust as Twitter’s,” he added.

Photo: Venture Capitalist Peter Thiel in his offices at the Presidio in San Francisco, Calif., on Tuesday, Sept. 30, 2014. John Green/ Bay Area News Group.


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