If you have not heard the term “hempreneur” before, you have definitely heard of venture capital, legalized marijuana, medical marijuana and the like. You just might not have heard of the financial or investing aspect mixed with this trend toward legalized marijuana and medical marijuana. With many OTC stocks around the theme of legalized marijuana having come public via reverse mergers of late, are you surprised that venture capital firms and private investors are investing millions of dollars into legalized marijuana ventures?
Privateer Holdings announced on Tuesday the completion of its Series B funding round for some $75 million in new funding. Privateer calls itself the world’s leading private equity firm investing exclusively in legal cannabis. The firm further said that this round was the largest private capital raise in the legal cannabis industry to date — and it brings the company’s fundraising total to $82 million.
If Privateer sounds familiar but you can’t place it, perhaps it is because 24/7 Wall St. covered it as one of the 10 most important companies in the marijuana industry that was given to us by the website Cannabis Business Executive (CBE). Full details about each company are at the CBE site.
Privateer Holdings showed that it has already invested in three disclosed investments to date:
- Marley Natural, a premium cannabis lifestyle brand deeply rooted in the life and legacy of Bob Marley
- Tilray, producers of premium medical cannabis in Canada
- Leafly, an online cannabis info community and site that claims more than 5 million monthly visitors
The company’s press release said that it will use the new financing “to build a global portfolio of billion dollar cannabis brands operating in multiple geographies around the world” by acquiring and launching new ventures. Privateer Holdings was founded in 2010 and its investor base is said to consist of ultra-high net worth individuals, family offices and institutional investors like Founders Fund (headed by PayPal co-founder Peter Thiel).
Privateer said that the firm closed this Series B round with a group of sophisticated family offices and institutional investors who made seven-figure and eight-figure investments. If this report sounds familiar, 24/7 Wall St. has read about the $75 million funding round for several months now. Other venture firms are targeting investments in marijuana as well. It seems safe to assume that many additional venture funding and private funding announcements should be expected ahead.
The move to legalized marijuana has already crossed over to public stocks, but most of those to date have been OTC and Pink Sheet stocks. Is it fair to ask about the move toward a marijuana ETF again?
One last note, for balance, is a word of caution for those who need to be reminded about private investing and the many pitfalls that can occur when investing in non-controversial fields. The Securities and Exchange Commission cautioned investors back in May of 2014 about the potential for fraud in microcap companies that claim their operations relate to the marijuana industry.