Snoop Dogg’s venture capital firm, Casa Verde, closed its $45 million debut fund in March with plans to make seed- and series A-bets on the ancillary cannabis industry — the ecosystem commonly described as “not touching the plant.”
The competition is more intense in areas of the cannabis ecosystem that touch the plant, according to Casa Verde Capital, which expects the U.S. industry this year to realize $10 billion in sales, CNBC reported.
The ancillary ecosystem includes agricultural tech, health and wellness, financial services, media, compliance and lab technology, according to the Casa Verde website.
Karan Wadhera, the managing partner at Casa Verde, worked at Goldman Sachs and Nomura Securities before joining Snoop in 2016 to take over securing and investing capital along with fellow managing director Evan Eneman, Techcrunch, reported.
Wadher told CNBC how his company analyzes opportunities in the growing marijuana industry.
“The cannabis industry has a lot of regulatory issues, especially on the state level,” Wadhera said. “They demand a lot of knowledge of what’s happening with products, whether it’s tagging products when they’re six inches tall (or) understanding movement, to the retail level — understanding where products are moving from the shelf to the customers. It’s tracked on a daily basis which makes this a particularly nuanced industry creating specific technologies to handle this.”
On the Casa Verde website “team” page, Snoop Dog is identified by his offstage name — Calvin Broadus, “an entertainment icon with more than 20 years of industry experience. Calvin, better known as Snoop Dogg, continues to pave the way in pop culture, technology adoption, and innovation.”
The firm has made eight investments so far, Wadhera told Techcrunch in March, with several new investments to be announced soon.
One of Casa Verde’s new investments was announced on April 18 when Green Bits, a cannabis point-of-sale and compliance platform, raised $17 million in a Series A round.
The Green Bits round was led by New York-based investment firm Tiger Global, which focuses on investing in internet and software companies.
Casa Verde believes it’s only a matter of time before regulations are updated on the federal level and truly meaningful adoption and sales can occur in the sector, Wadhera said.
Senate Minority Leader Chuck Schumer plans to introduce legislation on Friday April 27 to decriminalize marijuana on the federal level, adding a high-profile advocate in the effort to decriminalize, legalize and normalize marijuana use in America, NPR reported on 4/20.
“The bill by Sen. Schumer is a great step in that direction,” Wadhera told CNBC. “We absolutely think that federal legalization will put us on a par with countries like Canada which is already on the way to legalizing this summer.”
Wadhera brings a traditional banking background to an untraditional firm. “Our banking system is regulated by the federal government so at this point they’re very cautious to touch the space,” he said.
Casa Verde is writing checks of $1 million plus. “We won’t invest in companies that touch the plants,” Wadher said. “No dispensaries or cultivators or manufacturers. We’re investing in the picks and shovels.”
Its biggest investment is LeafLink, a marketplace for retailers and brands that allows a dispensary to log in and order from vendors on one consolidated platform.
Competition is rising as more people try to raise dedicated pools of capital focused on the space, and more mainstream funds are looking into the industry.
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What role does Snoop Dogg play in his business?
He’s among the most important cultural figures in this industry, which is incredibly important,” Wadher told Techcrunch. “His involvement lends a lot of credibility and excitement to our portfolio companies. He’s also there for input whenever we need it. He’s hands-off on the investment process, but when it comes to certain companies, he’s very involved, including with Merry Jane, a lifestyle media site (focused around cannabis). That’s content. That’s media. That’s Snoop’s bread and butter.”
