My best bud is a billionaire: Peter Thiel jumps into bed with dope upstarts

As Gordon Gecko might say: Weed. Is. Good.

Peter Thiel is betting big on bongs. The Paypal founder and billionaire venture capitalist has chosen to invest millions in private equity firm Privateer Holdings, which is focused on the rapidly expanding legal cannabis market.

Thiel's investment firm, Founders Fund, has put the bulk of a US$75m Series B funding round into the company, on top of the $22m it received in Series A.

Privateer has three subsidiaries, all focused on capitalizing on the legalization of cannabis in four US states, with up to six more states expected to follow in the next two years.

Leafly is a Yelp for tokers with four million unique users; Tilray is a mail-order dispensary based in Canada with 100 employees that shipped 35,000 packages in 2014; and Marley Natural provides cannabis strains, with agreement from the family of the famous reggae star and most famous pot-smoker of them all, Bob Marley.

Although the company has yet to make a profit, the VCs are betting on a combination of vertical integration, brand awareness (thanks to Bob Marley) and greater legitimacy through legalization. Total industry worth, according to Privateer, is $50bn but a cleaner, more professional and legal version could see that market grow several orders of magnitude, say Founders Fund.

The funds will be used to expand Privateer's businesses and invest in existing legal outfits, according to the company, which includes a number of high-level professionals from marketing and finance.

Its website explains: "From providing pure, reliable medical cannabis to Canadian patients to empowering consumers worldwide with a trustworthy cannabis information resource, our companies are in the business of creating meaningful returns, both financial and social."

Which is a different kind of sales pitch to the normal "you should try some of this, it will get you completely baked, man" that we have grown familiar with. ®

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