A Bob Marley lyric can serve as a prepackaged nugget of convenient wisdom for just about any situation. On a recent sunny Friday in a South of Market medical marijuana dispensary, Marley's words were coming from the lips of two sharp-dressed and sophisticated women from New York City: Tahira Rehmatullah, a Yale MBA who used to work on the mortgage-backed securities that fueled the subprime crisis, and Berrin Noorata, a 20-something branding- and fashion-industry veteran who lives in a gentrifying area of Brooklyn (and who, if you were not feeling accommodating, you would call a hipster).
Easily the most striking people in the room — where some of the early morning customers standing in line to buy cannabis or sitting on benches taking pulls from vaporizer bags looked as if they stumbled into the shop from one of the surviving SRO hotels in the area — the women were there for the first day of sales in San Francisco for Marley Natural, the official Marley family licensed line of cannabis products, for which they are the general manager and communications and marketing expert, respectively.
Choice Marley words, like "Herb is a plant. Herb is good for everything" are printed on almost everything Marley Natural had for sale at San Francisco Patients and Resource Center, in the running for title of the city's toniest (and best connected) dispensary: the $50 eighths of outdoor cannabis — a 10 to 15 percent premium over the other "sun-grown" offerings on the menu — the $40 vape pen cartridges, the Marley logo-branded rolling trays and bubbler pipes and beauty products.
So far, SPARC is the only San Francisco dispensary lucky enough to strike a deal with Marley Natural, in the running for the cannabis's industry's best-licensed brand and backed by Rehmatullah's private equity firm Privateer Holdings, which announced $75 million in Series B funding — much of it from PayPal co-founder Peter Thiel's Founders Fund, and all of it invested in cannabis. In addition to Marley, Privateer invested in Leafly, a web encyclopedia of marijuana strains and information, and Tilray, a Canadian cannabis producer with a license from Health Canada, the country's single-payer healthcare system, to grow and sell cannabis.
Herb is expected to be very, very good for Privateer, the biggest and best-funded but far from the only equity firm making recent investments in the gradually legalizing cannabis industry.
"Everyone thinks Big Pot bought out Marley Natural," says Rehmatullah, the statuesque general manager of the brand, who takes pains to explain the brand's philanthropic efforts in Jamaica, where proceeds from sales of Marley-branded weed in America will pay to start up small businesses back in Trenchtown, as evidence how this is not so.
For deeper questions about where the marijuana came from (California) and who grew it (producers already known to SPARC and to Oakland's Harborside Health Center, the country's biggest marijuana store by reputation, where Marley Natural went on sale the day before), Rehmatullah must pass me off to someone else. After all, her background is in finance, not phenotypes of weed, and she lives in Manhattan, where her brand's flagship products cannot be possessed, let alone legally sold.
But they can be funded.
It's likely that Bob himself — an astute businessman who may have sung about redemption and justice but whose brand, Tuff Gong, has enjoyed astonishing success spreading Jamaican and Rastafari culture to a worldwide audience in the nearly 35 very lucrative years since his death — would have been an eager partner in this venture. (The children of his, Rohan and Cedella, who struck the licensing deal with Privateer, insist on it, anyway.) Bob Marley's name and image already sell coffee, energy drinks, headphones, speakers, and much else. Using it to sell ganja is, well, only natural — but it's a move made feasible only by recent changes in California law.
Under the Medical Marijuana Regulation and Safety Act (or MMRSA), a package of bills signed by Gov. Jerry Brown last fall, for-profit commercial cannabis activity is now expressly allowed in the state for the first time. And just after Brown signed the bill into law, a U.S. District judge upheld acts of Congress that bar the federal Justice Department from interfering in the state's cannabis industry.
This is not Thiel's first bet on Bob's beloved plant. Nor is he going short on it. He and his former Founders Fund partner, Sean Parker, the 36-year-old billionaire who founded Napster and Spotify and was Facebook's first president, both partially bankrolled California's failed marijuana legalization initiative in 2010.
This year, Parker is the lead funder of the Adult Use of Marijuana Act, a voter initiative vying for the November ballot that would allow California to join Colorado, Washington, Oregon, and Alaska in allowing all adults 21 and over to use recreational marijuana. (Parker has stepped in to take the lead in funding legalization, contributing $1 million to date, when the industry and activists would or could not.)
If AUMA passes, the market for marijuana and for Marley Natural will explode, from the perhaps one million Californians who possess the doctor's recommendation currently required to purchase medical cannabis legally from a dispensary, to the two million or so adults in the state who self-report using any kind of marijuana, according to a 2014 Public Health Institute study.
The phrase "green rush" has been applied to the glut of growers, sellers, and trimmers who have flooded the state to cash in on marijuana's economic potential. But this current rush is different.
Whether you call it big pot or not, this is definitely the biggest-yet pot: Venture capital-backed marijuana has arrived.
Veterans from Wall Street are starting up funds and making investments, and newcomers from other industries are pitching ideas at business conferences and Shark Tank-like pitch events pulled straight from Silicon Valley playbooks. And other celebrities preceded Marley into the branding game. Rapper Snoop Dogg has invested in Eaze, a software platform for delivering cannabis founded by a Valley vet whose first company was sold to Microsoft. Women suffering menstrual cramps will soon be able to buy cannabis-based products endorsed by Whoopi Goldberg, who just announced a partnership with a women-owned, High Times Cannabis Cup-winning California collective. And famed Silicon Valley accelerator Y Combinator has invested in Meadow, a combination delivery-dispensary management software platform.