The investment by Founders Fund into cannabis industry-focused private equity firm Privateer Holdings is great news for the cannabis industry, which institutional investors have yet to engage with, according to Ryan Brown, president and chief executive of medical marijuana investment firm and consultancy GrowPros.
GrowPros, which helps medical marijuana companies to raise capital, structure their business or enter the industry, has not come across any institutional interest in the industry until now; most investment has come from the high net worth individual community, said Brown.
“When investment firms of that magnitude get into the industry it provides validation for other investors,” Brown told Agri Investor. “If the PayPal guy is getting involved then there’s some validity to it. These firms have a track record of predicting and often creating social trends so if they see this as a ground floor opportunity, other investors should follow suit.”
GrowPros is currently helping several medical marijuana companies to become licensed producers in Canada including raising $8 million in soft commitments for an Ottawa-based greenhouse project.
“Our vision is to be a venture partner of start-up businesses in the industry providing financial, strategic and organisational guidance,” said Brown. “Our goal by the end of 2015 is to raise $16 million through private equity financing for these projects and other cannabis related business we are working with.”