Peter Thiel may reckon regulators are just blowing smoke on weed. The PayPal billionaire's Founders Fund is backing the marijuana business, investing in Seattle-based farming firm Privateer Holdings. Though the stake could run up against US anti-drug laws, Thiel - like sharing-economy upstarts Airbnb and Uber - is wagering that the legal haze will clear. His reward could be sky-high returns.
America's cannabis market seems to be budding nicely. Oregon, Alaska and the District of Columbia voted in November to join Colorado and Washington in legalising recreational pot use. Nearly half of US states already allow medical marijuana.
The conflict between those states' laws and federal prohibitions creates headaches for the industry, though. Banks and other regulated financial institutions understandably refuse to make any pot-related investments. That forces marijuana farmers, pot shop owners and others involved in the trade to fund their endeavours with cash or capital provided by the shadow banking industry.
Privateer is a case in point. Its ganja-related businesses include a weed ratings website and a Canadian medical cannabis farm. Its first recreational marijuana brand - Marley Natural, a selection of "heirloom Jamaican cannabis strains inspired by those Bob Marley enjoyed" - is slated to go on sale this year.
Founded by three finance veterans hoping to put the weed business on a professional footing, Privateer seems a perfect fit for the libertarian-minded Thiel.
After all, he has plenty of experience with legally suspect industries. PayPal overcame a slew of regulations before growing into a thriving online payments company. Ride-sharing service Lyft and apartment rental website Airbnb - both backed by Founders Fund - are working to navigate mainly local regulations that in some markets limit or even prohibit their services. Lyft rival Uber is facing similar challenges.
Steady progress in changing state drug laws has given licit weed an air of inevitability, but the business could still turn out badly. Online gambling, for instance, suffered a crippling federal crackdown after operating for years with quasi-legal status in some states.
Silicon Valley's billions are, however, a force to be reckoned with. They may give Uncle Sam just the push he needs to mellow out on the law.
America's cannabis market seems to be budding nicely. Oregon, Alaska and the District of Columbia voted in November to join Colorado and Washington in legalising recreational pot use. Nearly half of US states already allow medical marijuana.
The conflict between those states' laws and federal prohibitions creates headaches for the industry, though. Banks and other regulated financial institutions understandably refuse to make any pot-related investments. That forces marijuana farmers, pot shop owners and others involved in the trade to fund their endeavours with cash or capital provided by the shadow banking industry.
Privateer is a case in point. Its ganja-related businesses include a weed ratings website and a Canadian medical cannabis farm. Its first recreational marijuana brand - Marley Natural, a selection of "heirloom Jamaican cannabis strains inspired by those Bob Marley enjoyed" - is slated to go on sale this year.
Founded by three finance veterans hoping to put the weed business on a professional footing, Privateer seems a perfect fit for the libertarian-minded Thiel.
After all, he has plenty of experience with legally suspect industries. PayPal overcame a slew of regulations before growing into a thriving online payments company. Ride-sharing service Lyft and apartment rental website Airbnb - both backed by Founders Fund - are working to navigate mainly local regulations that in some markets limit or even prohibit their services. Lyft rival Uber is facing similar challenges.
Steady progress in changing state drug laws has given licit weed an air of inevitability, but the business could still turn out badly. Online gambling, for instance, suffered a crippling federal crackdown after operating for years with quasi-legal status in some states.
Silicon Valley's billions are, however, a force to be reckoned with. They may give Uncle Sam just the push he needs to mellow out on the law.