Business is certainly budding for the folks at Privateer Holdings.
The Seattle-based marijuana company has raised $18.6 million, which is part of a $75 million Series B round that Privateer plans to close next month.
CEO and co-founder Brendan Kennedy told GeekWire that the bulk of the new money is coming from new investors who are showing interest in backing cannabis-related startups. He couldn’t say much about how the $75 million will be dispersed, but did add that “most of it will be used to invest in new opportunities globally.”
Privateer, which has already raised $22 million, is a private equity holding company that has acquired four marijuana-related companies in the past four years. They range from Seattle-based Leafly, a marijuana strain resource that won GeekWire’s App of the Year award in May, to Tilray, a startup Privateer founded in Canada that’s producing premium marijuana and selling it online.
Another Privateer subsidiary, Washington-based Arbormain, wants to build a massive facility south of Seattle that would house marijuana producers and processors. The Olympian has more details about the proposal that could result in Privateer putting $100 million toward the 200,000-square-foot building.
The company has come a long way since 2010. It took Privateer 18 months to raise its first $7 million, funding that Kennedy said was the “most difficult money I’ve ever raised.”
Now, though, investors are showing serious interest. While the marijuana industry is still complicated on numerous levels — from legal to political to social issues — the use of cannabis is quickly becoming more mainstream, especially given the legalization of recreational marijuana in Colorado and more recently Washington.
Kennedy said that Leafly has seen big traffic spikes ever since Washington began selling legal recreational pot a few weeks ago.
“There’s just a lot of people in country and world seeing what’s going on in Washington,” he said.
As more states legalize both recreational and medicinal marijuana, entrepreneurs and investors are taking note. With the amount of money involved in the nascent industry — Colorado could see more than $40 million in marijuana-related tax revenue this year — there appears to be ample opportunity for entrepreneurs with new business ideas.
Kennedy, who co-founded Privateer with Christian Groh and Michael Blue, told us earlier this month that entrepreneurs in the pot business are stepping up their game.
“Both Christian and I come from an investment banking background in Silicon Valley where startup competition is fierce and we were used to seeing very advanced pitches,” he said. “The cannabis industry hasn’t quite made it to that level yet, but there’s been a huge improvement since we first came into the cannabis space and I expect that trend to continue.”
That’s a similar sentiment shared by Troy Dayton, CEO of an angel investor network called The Arcview Group that is made up of nearly 300 high net-worth individuals who have invested more than $11 million in 14 different marijuana-related companies in the past 18 months.
Dayton said that these angels not only see the marijuana industry as a lucrative place to invest, but want to be a part of history.
“The investors notice that this could be the next great American industry and are looking to make money,” he said. “But they are also looking at this as an impact investment. Many want to see the day when not a single adult is punished for marijuana and they see investing in this industry as a way to make that happen.”
