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 a Canadian medical marijuana growing operation, Tilray, and other cannabis ventures.
Founders Fund is not disclosing the terms. Lewis won’t discuss them either, 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 approved 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.”
– Read the entire article at The Guardian.