A New York-based private equity firm just raised what it believes is the largest amount of capital ever to invest in the legal marijuana industry

REUTERS/Dominick Reuter

A woman lights a joint as a group of cannabis advocates smoke marijuana and march down Broad Street toward the Wells Fargo Center on the final day of the Democratic National Convention in Philadelphia, Pennsylvania, U.S., July 28, 2016.

Tuatara Capital just raised a $93 million fund to invest exclusively in the legal marijuana industry, The Wall Street Journal reported.

Two of Tuatara's principals, Al Foreman and Mark Zittman, believe that it's the largest fund in the marijuana industry.

"Our understanding is that we have the largest pool of capital by fund and firm size in space," Foreman told Business Insider during a joint-call with Zittman.

Founded in 2014 by Zittman and Foreman, the New York-based private equity firm exclusively focuses on the legal cannabis industry.

Tuatara raised money from a "good mix" of high-net-worth individuals and family offices, Foreman and Zittman explained. Institutional investors, like pension funds or banks, have mostly shied away from investing directly in the industry since marijuana is classified as a Schedule I drug, meaning it's still illegal at the federal level.

Many of Tuatara's investors, however, are "quasi-institutional," as Foreman classified them. That means professional investors operating as money managers for high-net-worth clients and family offices. While the capital itself is still coming from individuals, it's clear professional money managers are paying close attention to marijuana.

The firm originally targeted $80 million for its first fund, and the partners tapped their long-standing connections on Wall Street to raise the cash. Both worked extensively on Wall Street. Zittman spent over 15 years as a senior managing director at Guggenheim Partners, and Foreman was an investment banker at J.P. Morgan and a managing director at Highbridge Principal Strategies, according to Tuatara's website.

So far, Tuatara has led Series A rounds for Willie's Reserve, singer Willie Nelson's cannabis brand, and Teewinot Life Sciences Corp., a cannabis pharmaceutical company, according to The Wall Street Journal.

REUTERS/David McNew/File Photo

People look at jars of marijuana at the medical marijuana farmers market at the California Heritage Market in Los Angeles, California July 11, 2014.

Reactions from other funds in the marijuana market have been positive.

"I think Tuatara should be congratulated for the hard work that went into securing $93 million for deployments into the cannabis industry," Steve Gormley, the CEO of Seventh Point, another marijuana-focused investment firm, told Business Insider in an email. "The industry justifies a multibillion dollar investment from firms like Seventh Point and Tuatara."

The money might even have larger implications.

"Ninety-three million is an impressive amount of money to raise," Derek Peterson, the CEO of Terra Tech Corp, a publicly-traded marijuana company, told Business Insider in an email. "Having a professional fund manager like Tuatara being able to accomplish this shows there's an increasing appetite to invest in this industry, especially from larger investors who were at first concerned with the legal and political risk factors."

Tuatara is one of a number of funds set up to invest in the legal marijuana industry. Seventh Point is looking at completing a $75 million fund this year, and Privateer Holdings, the first solely cannabis-focused fund, landed $75 million in funding in a round anchored by the legendary Silicon Valley venture capital firm Founders Fund.

Interest in the space will likely continue to grow as well. Legalizing medical and recreational marijuana is hitting the ballot in a number of states in November, including California, Maine, Nevada, Arizona, Massachusetts, Florida, Missouri, and Michigan.