The Marijuana Billionaire Who Doesn’t Smoke Weed
By Jen Wieczner
Image courtesy Spencer Lowell for Fortune
College of Environmental Design alumnus Brendan Kennedy (B.A. Architecture '93) is the founder of Tilray, the first medical marijuana firm to have an IPO on the U.S. stock market. Today, the Canadian-based but American-run company is valued at $9 billion. Among legal cannabis companies, it has the largest international footprint and is the second largest firm in the market. What makes Tilray from other companies is its focus on data analytics, an approach that directly influences its strategy: predicting where marijuana will be legalized next, and to situate itself in that market before its competitors do.
This approach— which has earned Tilray multimillion dollar partnerships with industry giants such as Anheuser-Busch InBev (behind Budweiser)— is largely the work of Kennedy, who started out studying Architecture at UC Berkeley and working in construction. After completing his MBA at Yale, Kennedy worked for an internal analytics startup in Silicon Valley, which helped venture capitalists and their portfolio companies value their private stock. Noticing patterns in public opinion helped Kennedy to identify which states were most likely to legalize cannabis next. In 2011, he co-founded a private equity firm, Privateer Holdings, which exclusively focused on acquiring and creating cannabis holding brands. The acquisition of cannabis and dispensary review site Leafly gave Kennedy the data he and his partners needed to expand into cannabis production in 2013 and to scale the company to the level of success it has achieved today.
Kennedy has complete conviction that “the end is near” for U.S. cannabis prohibition. “I don’t know when the Berlin Wall will topple over, but we’re getting closer and closer to that point,” he says. It may happen sooner than people think, thanks to next year’s presidential election. More of the public now views marijuana as a salve for confounding problems from the opioid crisis (overdose deaths dropped 21% to 25% in states with medical marijuana laws, a 2018 study by the think tank Rand found) to government deficits. Democratic hopefuls have signaled they will champion the issue. On the other side of the aisle, a recent Gallup poll found 53% of Republicans now support legalizing marijuana. That shift is owing in part to a concerted effort by advocates to reframe the debate in terms of states’ rights.
Among the people persuaded by that argument is President Trump, who has pledged to back legislation that would protect states’ marijuana laws from federal interference. And in a fraught campaign season, legalization could be a winning play.
If Kennedy were setting a line in Vegas, he likes to say, he would pick 2021 as the year the U.S. will legalize cannabis. If he’s wrong, and the U.S. doesn’t budge? Not the end of the world, he says; he expects medical legalization to double to 70 other countries by then. Sure, as an American business leader, he’d feel let down by his government: “They’ll basically be ensuring that the companies that dominate this industry in the next decade are all based outside the U.S.” For the CEO of a Canadian company, though, that’s not really a problem.