Private Equity Embraces Pot as Banks Reject Money

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Jan. 28 (Bloomberg) -- Brendan Kennedy, CEO at Privateer Holdings, discusses private equity investments in legalized marijuana and challenges faced from banks and the U.S. government on Bloomberg Television’s “Market Makers.”

Has been run every year since 1972, when nixon declared a war on drugs.

We started looking at information from the bea -- from the dea to size the markets both in the u.s. and internationally.

We went to cannabis groves in 20 states in the u.s.. we went to medical dispensaries in california.

We talked to growers and people who were making cannabis infused products as well as doctors and dispensaries.

It was thoreau but old-fashioned boots on the ground research.

-- it was thoreau but -- it was thorough but old-fashioned boots on the ground research.

We started with a zero revenue.

The company has broken even and will be profitable in the next two to three months.

Of we have created an international version where about 20% of our traffic is international.

That is an investment that is paying off.

We have also launched a canadian subsidiary that would have a license from the federal government of canada to produce, process, and package.

Will any of these companies be taken public?

You think acceptance is going to get to the point where a company can actually be publicly traded?

The end of prohibition is inevitable and the legalization is inevitable.

We size to between 40 and $50 billion.

That $40 billion to $50 billion.

Are your investors locked up that long?

They are.

Our investors come from the left and the right.

They are liberal progressive democrats.

If you put them in a room there won't be any issue other than this one.

They believe that prohibition should end for different reasons.

They are united in that belief.

They are looking for a social return.

We believe that an exit will take place either when our companies go public or they are acquired by a fortune 500 company.

There is a common united objective.

Is it impossible to do businesses and banks and interact with them?

Thinking in this industry is nearly impossible.

We have had -- we pitched our objectives in our business strategy to about 18 banks.

We have been kicked out from two large banks very unceremoniously.

It is a challenge.

Not only is it a challenge for us but we don't do anything that is in violation of any local laws.

It is also an issue for our employees.

We had individual employees, one as recently as two weeks ago who had his personal checking account closed by chase because he was receiving direct deposits from one of our subsidiaries, which is an information website that provides information to cannibal patients around the u.s.. so jpmorgan chase terminated his account and cited the reason as receiving money from medical marijuana practice?

That is exactly right.

Jpmorgan chase is comfortable.

Talk to us about the biggest risk you to anticipate.

The biggest risk we see is from the federal government.

Bureaucrats and politicians are always the last one to accept change.

We are now in a position where 58% of americans believe legalization should take place.

There have been some very unfortunate comments in the past few days.

We see rollback of legalization to be a difficult and other on the part of individual states.

That was brendan kennedy, he

This text has been automatically generated. It may not be 100% accurate.


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