Privateer Holdings, a Seattle-based private equity firm, is making a very big, and what looks to be a very smart, investment as Canada's national medical marijuana law -- Health Canada -- takes effect on April 1, 2014.
$10 million is being poured into construction of a much larger, 60,000-square-foot Duke Point pot factory owned by a company called Tilray, the production arm of Lafitte Ventures, the Canadian subsidiary of Seattle private equity firm Privateer Holdings.
According to Brendan Kennedy, CEO of Privateer Holdings, a private equity firm that invests in the legal cannabis industry, 81 percent of Americans believe that medical cannabis should be legal if it’s prescribed by a doctor. “You can’t get 81 percent of Americans to agree on anything, but they agree on this,” he said.
More than 400 people applied for about 60 positions at the Tilray plant near the Duke Point Ferry Terminal, including cultivators, security guards, and customer service, packaging, shipping and receiving representatives.
Tilray filtered through more than 400 applications for jobs at its Duke Point medical marijuana factory during a unique hiring fair over the weekend. Selected candidates were invited to a downtown hotel where they interviewed for jobs to cultivate, sell, trim, secure and ship cannabis in the first event of its kind ever to hit Nanaimo.
“Smaller operations were having some challenges,” Kennedy said. “We saw an opportunity to create larger facilities to lease (to companies that comply with I-502) so a variety of businesses could produce under one roof.”
“Generations coming up now don’t see what the big deal is,” says Brian Wansolich, 39, wearing a white coat emblazoned with the logo of his online cannabis ratings service, Leafly. “My parents still have moral problems with it, but now they see we can tax this and get states out of trouble. It’s the American way.”
"It's a $40 to 50 billion industry in the U.S. alone," says Groh. "Internationally, it's north of $200 billion. The economics are already there. The problem is, there's a black market, a gray market and a medical market, and it's a matter of trying to get those dollars to a legitimized industry."
"What we look for are holes in the marketplace, where no one is thinking about the opportunity," said Kennedy, who through Privateer raised $7 million from investors last year and expects to raise at least another $50 million by April.
Tilray is a company established by Lafitte Ventures, itself a Canadian subsidiary of U.S. equity firm Privateer Holdings. That group was established in 2010 to make strategic investments in a burgeoning market for legal pot.
Brendan Kennedy, a co-founder of Privateer Holdings, a Seattle-based private-equity firm focusing on cannabis companies, also says the pitches he's seeing from prospective investment targets are "much more professional than those we saw three years ago."