The impending de-criminalization of cannabis means money. And where there’s money, there’s venture capital: private funds that invest in startups, hoping to magnify their investments many times over when their companies “exit” (go public or get acquired). And at the TechCrunch Disrupt startup conference in New York this week, two VCs took the stage to somberly discuss the opportunities in this emerging market.
The funders: Brendan Kennedy, from Privateer Holdings, a private equity firm focused on the emerging cannabis market. Privateer is backed by the famous New York venture firm, Founders Fund, represented by Geoff Lewis at the conference.
The two pot-friendly funders are clear that the tide is turning for the legalization of cannabis. Kennedy quoted the figure that more than 50% of Americans think it should be legal for all adults, while 84% think it should be legal for medical applications. As Kennedy said, “The war has already been lost by the government. It’s just a matter of when it ends.“
Pot-friendly investors Geoff Lewis (left) and Brendan Kennedy (center), interviewed by TechCrunch’s Ryan Lawler (right). (Photo: Rafe Needleman/Yahoo)
At the moment, Privateer has three investments in the cannabis market:
Leafly. This is a four-year-old startup that helps consumers and patients learn about individual strains of marijuana. From people looking for a nice clean high on a Friday night, to medical patients looking for pain relief, the database has about 1,200 strains of cannabis and can point its customers to 2,400 dispensaries. “It’s a search engine for pot,” Kennedy admitted.
Tilray is an actual cannabis grower. It’s Canadian, though, and can’t dispense outside Canada. Kennedy said the company ships directly from its own 60,000 square-foot facility, which he called, “mind-blowing” for its sophistication.
Marley Natural is gearing up to sell cannabis products (the herb itself as well as lotions) when doing so becomes legal. It will also sell accessories. And yes, Privateer has been dealing with Bob Marley’s family in getting this company running.
The venture community tends to move in a herd: Where one VC gets traction, others follow. There’s not a flood yet of VC funding in cannabis, but as the regulations lift around the country, expect to see more private money come to give this industry a push. As if it needs it.