Bob Marley: Marlboro Man of marijuana?
Privateer Holdings, a Seattle-based private equity firm that invests in the marijuana industry, has struck a deal with the estate of the Jamaican reggae star to launch a global cannabis brand.
Its Marley Natural subsidiary will start selling products late next year, including "heirloom Jamaican cannabis strains", marijuana-infused skin creams and lip balms, and accessories such as vaporisers and pipes "based on those that Bob preferred".
It is Privateer's biggest move into the blossoming consumer market for recreational marijuana that has emerged thanks to the legalisation of sales and production in several US states and Uruguay, decriminalisation in other places, and growing acceptance of medicinal use.
In the US, the total medical and recreational market is expected to hit US$2.6bn in revenue this year. America's illegal cannabis market was estimated at about US$40bn in 2010 by Rand Corp, the think-tank.
For Brendan Kennedy, Privateer's chief executive, the offer to partner with Marley's estate was irresistible.
"The question we've been asking ourselves for four and a half years is: what does the first global brand look like in this industry?" he said. "If you were to look throughout history for the one person most associated with this product, it would be Bob Marley. He has a global reach."
The singer's cultural status has not dimmed since his death in 1981. Marley's estate brought in US$20m in the past year, putting him at number five on Forbes' annual list of top-earning deceased celebrities - behind Michael Jackson and Elvis Presley, but ahead of Marilyn Monroe and John Lennon. His greatest hits album, Legend, first released in 1984, hit number five on the Billboard sales chart this September.
His heirs have also traded on his name to launch a number of businesses, including House of Marley, which sells headphones and audio accessories, and Marley Coffee. The family has been caught up over the years in legal battles with each other and with Marley's record label over control of his assets, image, name and music. The singer died without a will.
The decision to step into the emerging legitimate marijuana market is in keeping with Marley's long-time advocacy for legalisation and social justice, said Cedella Marley, the singer's daughter.
"Opinions toward cannabis are changing. People are recognising the benefits of the herb," she said. "Our father was leading this conversation for 50 years so it's natural that he's part of this conversation today."
Marley Natural products will be sold in countries and jurisdictions where they are legal, including cannabis in some places. Mr Kennedy said he was interested in markets including the Netherlands, Uruguay, Canada, Spain and Israel.
Financial terms of the arrangement were not disclosed, but Marley Natural will be a wholly owned subsidiary within Privateer and the family is participating in Privateer, Mr Kennedy said.
Privateer has raised US$22m through equity funding and a convertible bridge loan. It is in the midst of another funding round, expected to close before the end of this year, that will add another US$50m. Its businesses include Tilray, a Canadian medical marijuana producer, and Leafly, an online cannabis ratings site.
The recent liberalisation of US marijuana laws has spurred a rush of companies and investors into the market. The parent company of High Times, the US marijuana magazine, has launched a private equity fund that is aiming to raise US$300m to invest in cannabis ventures. Tom Bollich, the co-founder of online gaming group Zynga, has become chief executive of a marijuana growing equipment company.
"The midterm elections sent a clear message that the end of prohibition is a mainstream cause supported by an overwhelming majority of Americans across the political spectrum," Mr Kennedy said, referring to recent votes in Oregon, Alaska and Washington, DC, to allow access to recreational marijuana.
"We see this as a mainstream product, consumed by people around the US and around the world," he said. "Everybody has a little bit of Bob in their playlist."
(c) The Financial Times Limited 2014