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Brendan Kennedy in Privateer Holdings’ Seattle office.

Image: Amber Fouts

Brendan Kennedy’s first marijuana pitch to investors took 32 minutes—twice as long as what the venture capitalist normally shoots for. His new firm, Privateer Holdings, had eyes on its first acquisition, an emerging website called Leafly. But six years ago there was no quick and easy way to explain the cannabis business to a boardroom. “It was the most complicated pitch I’d ever done,” he remembers. “Today, I don’t have to do any education when talking to investors.”

That’s because recreational marijuana made over $6 billion in the U.S. last year—a paradigm shift that Kennedy forecast back in 2010, after an exhaustive 12-month study of international cannabis usage. “We determined that marijuana is a mainstream product consumed by mainstream people.” So he left San Francisco and the tech world behind to start a cannabis-focused private equity firm in Seattle.

The risks Privateer Holdings now takes building its portfolio—Leafly, medicinal company Tilray, and the official Bob Marley brand Marley Natural—differ from the sort of risks Kennedy used to assess back in Silicon Valley. When investing in tech, the concerns were: Can engineers build it and will people buy it? “In cannabis we know they can grow it. And we know people will buy it,” says Kennedy. The primary risk is regulatory: What is going to happen around the world as prohibition ends?

And it is ending, he assures. With more states legalizing marijuana every election cycle, and countries like Germany and Australia following Canada with nationwide medical legislation, Privateer Holdings’ pitches might keep getting shorter and shorter.

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