Paypal Founder Peter Thiel Becomes Marijuana's First Big Investor

[420]

Peter Thiel has never shied away from investing in companies so experimental that they're too new to even be part of an industry.

So it's hardly surprising that Thiel's Founders Fund has become the first institutional investor to make an investment in the nascent cannabis industry — a business that isn't even legal in half of the states in the country.

This morning, Founders Fund confirmed the buzz that has been circulating for several weeks: partner Geoff Lewis is leading an effort to take a minority stake in Privateer Holdings, the Seattle-based company that owns Leafly.com. For those who haven't heard of it, Leafly is like Yelp for pot and medical marijuana buyers looking for reviews and price information. Privateer also controls as a Canadian medical marijuana growing operation, Tilray, and other cannabis ventures.

Founders Fund is not disclosing the terms. Lewis won't discuss the terms, other than to say it's a minority stake in Privateer, which hopes to turn a profit this year. As of its last public disclosure to the SEC last July, however, Privateer still was hoping to raise another $56m of the total $75m it has been seeking in its most recent funding round.

Investing in the cannabis business — now legal for recreational use in only four states and the District of Columbia, and with at least some form of medical marijuana usage okayed by 24 states — "is just a slightly more extreme version of something we've shown in our other investments that we're comfortable with," says Lewis. "We're fine with investing in businesses with regulatory ambiguity, because we believe that regulation follows public sentiment."

More than a year has elapsed since the first polls showed Americans now clearly favor legalizing marijuana usage, with support for making medical marijuana legal reaching 80% in some surveys.

"Then the first retail stores opened in Colorado, and the world didn't end, and the federal government didn't step in, which they could have done," says Brendan Kennedy, co-founder and CEO of Privateer.

Then, late last year, the omnibus spending bill passed in a frantic rush, contained provisions that will prevent the Justice Department from spending any of its resources fighting medical marijuana laws in those jurisdictions that now make cannabis available to people with a doctor's prescription.

"Every time the tide recedes, we are able to take a step forward" in building Privateer's existing businesses and in seeking out new investments, Kennedy said.

Indeed, at this point, Lewis figures that the biggest risk of Founders Fund's latest investment is pretty prosaic: can Privateer's founders execute their vision of transforming their company into the world's first cannabis conglomerate?

Having studied the industry, and Privateer, for about 18 months before deciding to forge ahead, Lewis is optimistic.

"At this point, we don't think there is any other company in Privateer's league. They have a strong first-mover advantage," — that's Silicon Valley speak for planting your flag first — "and they're in a position to build a strong brand."

Indeed, if you ask Lewis or Kennedy, one of the key factors in determining whether or not Privateer will become the Starbucks of the embryonic cannabis industry is precisely that: not its business idea, but its ability to get the job done.

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[hempaz]

I like the idea of an amendment to the Arizona Constitution better than an introduced state house of representatives bill, or an introduced state senate bill for that matter.

Both of which, if approved, would probably end up being vetoed by Arizona's newly elected governor.

Being a political 'do-nut' state, with a conservative base in the center of the state (Maricopa County) and a rim of counties that tend to lean blue, including city #2 Tucson, Arizona legislators are currently stuck in a '50's mindset and I doubt the bill will make it out of committee again.

The $50 tax is a little bit stiff, given the course of retail #MedMj is headed to approximately $25 per pound for hi-quality flower buds with the advent of native american sales now buffeting both the current #MedMj and future #RecMj dispensary models.

Before dispensaries, but after #MedMj was made legal in Arizona by voter decree, the Director of Health and Human Services could stamp each green card approval with the words 'Authority To Cultivate'.

And, as a consequence, each #MedMj patient could grow (12) personal #MedMj plants with a theoretical limit of 2.5 ounces every two weeks.

That right given to us by the voters of the State of Arizona was then repealed by the Department of Health and Human Services with the advent of the opening of legal dispensaries in order to direct cash flow towards the newly awarded dispensaries.

The right of the people of the State of Arizona to cultivate their own medicine should not be abridged.

Especially now that the native tribes of Arizona and New Mexico and Utah all have the option to engage in both #MedMj and #RecMj cultivation with the tacit blessing of the federal government.

And, the natives that opt for cannabis cultivation are not thinking small potatoes.

They want 10,000 heads of 'lettuce' grown in their new acre-wide facilities PER DAY !

Imagine what levels of poundage of cannabis flower buds can be grown in such multi-million dollar mega facilities!

Most of the flower buds will simply be distilled into wax and budder and glass to ease the strain on transportation of the portable pot items into the fledgling marketplace, thus bypassing the current dispensary framework altogether.

Tribal areas of the White Mountains in the eastern part of the state, the Gila River tribal lands immediately east of downtown Scottsdale, areas south of the City of Phoenix, and areas north near the Grand Canyon (Hulapai) and the Coconino National Forest are all now in jeopardy of being overrun with marijuana grows designed to do one thing.

Turn a plant into cash.