Source: Leafly.

Small retail investors aren't the only people who think there could be money made by investing in marijuana. The big investors are starting to get interested in marijuana's profit potential, too.

Stepping up to the plate
The marijuana industry remains mostly in the shadows; however, the passage of medical marijuana legislation in 23 states and of recreational marijuana laws in four states is starting to attract the attention of private equity investors, an important step in the evolution of the marijuana industry from emerging to developed.

Last week, Privateer Holdings, a marijuana-focused firm that owns three different marijuana-based businesses, reported that the Founders Fund, a venture capital firm backed by Peter Thiel, the billionaire co-founder of PayPal, is investing millions in it.

The investment by the Founders Fund, which invests the assets of some of Silicon Valley's best-known entrepreneurs, is a resounding endorsement of the potential profit opportunity that "cannabusiness" offers. That's because private equity firms like Founders Fund don't approach investments without doing substantial research and due diligence -- not only on businesses, but on management, too.

In the case of Founders Fund's investment in Privateer Holdings, Founders spent more than a year digging into the pros and cons of investing in the marijuana industry. In the end, Founders Fund determined that the political risk posed by powerful opponents such as Las Vegas Sands' Sheldon Adelson, who is credited with derailing Florida's marijuana initiative at the polls last November, were outweighed by the groundswell of support the industry is enjoying from cannabis supporters. In short, Founders determined that the potential opportunity to create a soup-to-nuts marijuana business that could one day have a significant regional, if not national, reach, was too great to ignore. According to a study by Greenwave Advisors, the legal cannabis industry could have revenue of more than $35 billion (yes, with a "B") by 2020 if it was legalized nationally.

Source: Leafly.

Sum that's bigger than the parts
The investment in Privateer Holdings suggests that marijuana entrepreneurs may want to approach their businesses holistically. That's because Privateer Holdings has cobbled together three different cannabis enterprises, each of which could have long-term potential.

The company's three marijuana businesses include Canadian medical marijuana grower and distributor Tilray, marijuana content creator Leafly, and marijuana consumer products business Marley Natural, which has a 30-year license to use Bob Marley's name and image on products including lotions and vaporizers.

Currently, those businesses aren't setting revenue records, but they do post sales measured in the millions of dollars per year. According to Wired, Tilray has 4,000 customers and is on pace to have $25 million in sales, and Leafly has 4 million monthly users and could deliver $12 million in revenue in 2015.

Looking ahead
Private equity isn't afraid of risk, as long as it can define and control it. In the case of marijuana, there are plenty of things that could go haywire. Although 23 states have made medical marijuana legal and four have embraced recreational marijuana (Colorado, Oregon, Washington, and Alaska, for those interested!), many states remain on the sidelines.

The risk that other states will continue to outlaw marijuana, however, appears to be dwindling. The Marijuana Policy Project, which has backed successful state pro-marijuana policies in the past, is supporting efforts to legalize or expand marijuana legalization in Arizona, California, Maine, Massachusetts, and California. Those states could vote on measures as soon as 2016, when the presidential election is expected to result in a larger proportion of younger, ostensibly pro-cannabis, voters. If so, Founders Fund could find that its investment in Privateer Holdings proves savvy.