Marijuana industry rides high thanks to celebrity investors
Willie Nelson and Snoop Dogg’s involvement in the burgeoning marijuana business may not come as a shock, but professional athletes and a former boyband member are also getting in on a potentially lucrative endeavor.
Story by Scott Keyes / Courtesy of Guardian News & Media Ltd
Lured by rapid growth prospects for a lifestyle product long beloved by many celebrities, many are starting to pour their money into one of the newest US industries: marijuana.
The list of celebrities who are financially (and publicly) backing pot-related businesses includes a number of individuals whose support will likely surprise no one, including rapper Snoop Dogg, country music star Willie Nelson, actor Seth Rogen, and members of the late Bob Marley’s family.
But there’s also a growing list of celebrities not commonly associated with marijuana. Former boyband star (and ex-husband of Jessica Simpson) Nick Lachey, former NBA great Oscar Robertson, former talk show host Montel Williams, singer Melissa Etheridge, and current NFL defensive tackle Frostee Rucker are all investing money in pot.
For some, it is an affinity for marijuana that drove them to get into the business.
“A lot of the celebrities that have invested so far, this has been their hobby for a long time,” Chris Walsh, the managing editor at Marijuana Business Daily, said. “Many are tied to cannabis on a personal level.”
Tahira Rehmatullah, general manager at Marley Naturals, the cannabis company founded by members of the Marley clan, agreed.
“There’s this very close link with the Marley family and cannabis,” she said. “It’s part of their heritage and culture.”
Elizabeth Hogan, vice-president of brand and communications at Willie’s Reserve, also pointed to Willie Nelson’s fervent opposition to the criminalization of marijuana as a reason he got into the industry. “For him, cannabis is a big lightning rod issue for that personal freedom,” Hogan said. Nelson himself put it succinctly in a Guardian interview earlier this year: “I’ve bought a lot of pot over the years, and now I’m going to sell some back.”
Both Marley Natural and Willie’s Reserve have partnered with private equity firms to fund and grow their businesses. The two enterprises hope their products will hit the shelves by early 2016.
But no celebrity has been pouring money into the marijuana industry as fervently as Calvin Broadus, the rapper more commonly known as Snoop Dogg. (He also has a number of other monikers, including Snoop Lion, the stage name he adopted after visiting Jamaica, converting to Rastafarianism, and releasing a reggae album.)
Earlier this year, Snoop founded a cannabis-oriented venture capital fund which he named Casa Verde Capital, Spanish for green house. The rapper plans to raise $25m in funding and has already directed investments towards a number of marijuana start-ups, including an upcoming cannabis news site he founded with Seth Rogen and others, named Merry Jane, as well as a medical marijuana delivery business called Eaze.
Cheryl Shuman, spokeswoman for Eaze and founder of the Beverly Hills CannabisClub, said she’s been inundated with requests from various celebrities who want to get involved in the marijuana industry.
“Celebrities love cannabis,” she said “Seriously.”
Though she couldn’t publicly disclose who most of the investors were, she confirmed that there were a number of high-profile individuals who were either quietly investing in the pot sector or actively considering such a move. “This is the biggest investment opportunity in our lifetime. Much bigger than the dotcom boom ever was,” Shuman said.
Indeed, a study from Marijuana Business Daily estimated that medical and recreational marijuana sales will reach $3.1bn this year, nearly double the $1.6bn in 2013 sales. By 2018, sales are expected to double again. Investments that have the potential to grow that fast are exceedingly rare.
That business opportunity may be the primary motivation for many other less-predictable celebrity investors, according to Walsh.
Lachey, Robertson, and Rucker are all investors in the ResponsibleOhio campaign, a ballot initiative this November in which Buckeye State voters will determine whether to legalize not just medical marijuana, but recreational pot as well. A victory on the ballot initiative would put a limit on the number of grow sites in Ohio at ten. These three celebrities would be among a small number of investors in these grow sites who could receive a big return on their investment.
Frostee Rucker’s involvement is of particular interest because he is still in the NFL. All NFL players must abide by the league’s strict policies on drugs and personal conduct off the field. The NFL regularly punishes players who test positive for marijuana, including a yearlong suspension in 2014 for Rucker’s teammate Daryl Washington.
George Atallah, assistant executive director of external affairs for the NFL Players Association, said that there’s nothing untoward about Rucker’s financial stake in ResponsibleOhio. “There is no issue here as Frostee was exercising his democratic rights, which do not violate the CBA/Personal Conduct Policy/Drug Policies,” Atallah wrote.
Oscar Robertson, one of the most famous NBA players in history, framed his support by pointing to the benefits of medical marijuana. “It’s a terrible feeling when you can’t help someone suffering from cancer or another debilitating medical condition – I know from personal experience,” Robertson noted on ResponsibleOhio’s website. “But medical marijuana can give our loved ones relief. I’m part of ResponsibleOhio because I want to be part of making this change a reality.”
Melissa Etheridge and Montel Williams have both gotten in on the green rush in other ways. Etheridge, who was diagnosed with breast cancer in 2004 and soon began using medical marijuana, is helping create a line of cannabis-infused wines. Williams, for his part, opened a California-based medical marijuana dispensary in 2011.
Not all celebrities who would like to be public investors in marijuana are able to do so, though, Shuman argued. “Many can’t come out and say they’re a proud cannabis consumer or supporter because they have contracts that would be canceled and there’s so many people who work for them and depend on them,” she said, pointing to the decision by Kellogg’s to drop Michael Phelps as a celebrity endorser after photos came out showing the Olympian swimmer smoking from a bong.
But celebrities like Willie Nelson who are already so publicly associated with weed are hoping that their personal branding could drive up future sales. Hogan, of Willie’s Reserve, said that “so many people talk about smoking with Willie being on their bucket list”, but for the vast majority who won’t get that privilege, his brand of marijuana “makes that possible in another way”.
Celebrity branding may boost sales, but there’s no guarantee. A 2015 study from Marijuana Business Daily asked cannabis users what factors were most important to them when visiting a dispensary. Most pointed to features like a well-stocked inventory and knowledgeable budtenders. One of the least valued factors: a celebrity endorsement.