2H phase tungsten diselenide (WSe2) is a p-type 2D semiconductor from the transition metal dichalcogenides (TMDs) family with unique optoelectrical properties. Solution phase production of atomically thin WSe2 is challenging due to its instability under ambient conditions. We present a highly efficient and scalable solution method for simultaneously exfoliating and functionalizing WSe2 by leveraging the non-covalent interaction between mercapto-group and bulk WSe2. Single and few-layer 2H phase pure WSe2 sheets of lateral size up to 5 mu m with minimal basal plane defects, as revealed by XPS, Raman and FTIR spectroscopy, are produced in a water-ethanol mixture. Remarkably, WSe2 dispersion remains stable even at high concentrations (10 mg/mL) and exhibited high colloidal stability with a shelf-life exceeding a year. The findings from our study suggest that through precise manipulation of intercalation chemistry, mass production of solution-processable phase-sensitive 2D materials such as WSe2 can be achieved. This advancement holds great potential for facilitating their practical utilization in various real-world applications.