Casa Verde Capital, the mutual fund co-founded by cannabis connoisseur Snoop Dogg (also known as Calvin Broadus), has closed $ 100 million on its second mutual fund, according to the SEC.
The fund, whose managing director is Karan Wadhera declined to comment on this article and managed to raise more cash than the cannabis product market seems ready for another phase of expansion.
“What happened to the public perception of the cannabis industry is not too dissimilar to the dot-com bubble of the late 1990s, where there was a lot of hype – much of it being driven by public corporations – and a lot of speculative trading and valuations that wasn't in reality really justified. (We're talking about) predictions for several years into the future and insane sales multipliers beyond that, ”Wadhera said of the last bust when speaking to . in July. “Things got really frothy and it finally burst, and last April or May was kind of the high point of that moment. At that point, things began to weigh up. And it is these names, especially the public names, that have been hit particularly hard. "
The industry has since returned.
“Cannabis is sitting here today, more than four months after COVID, and has really proven to be a non-cyclical industry. Cannabis was seen as a vital business across the United States. We had record sales in March, April and May and the trend has continued, ”said Wadhera in July. "And now that we are in an environment where governments are looking for additional sources of tax revenue, the potential urgency to legalize cannabis will be, which will be hugely positive for the industry."
There is no indication of the goal for the new venture capital fund, but with the new fundraising, Casa Verde has more than doubled the size of its original investment vehicle.
Launched since Broadus, Wadhera and a third partner and Cashmere Agency and Stampede Management founder Ted Chung With their debut fund in 2018, weed companies have seen a rollercoaster business cycle of boom and bust.
Despite these market fluctuations, Casa Verde has managed to build a portfolio worth at least $ 200 million, according to people with knowledge of the company. This money was raised through several special purpose vehicles and other donation mechanisms along with the flagship fund.
The overall market for cannabis and cannabinoid derivatives is expected to reach $ 34 billion by 2025, according to an analyst report by . by investment bank Cowen.
With Arizona Montana, New Jersey, and South Dakota have all passed legalization measures for adult cannabis in their states. The investment bank forecast growth of around 30 percent compared to its overall addressable market estimates.
For its part, Casa Verde has always taken a comprehensive look at the potentially addressable market that cannabis and its chemical compounds could conquer.
Nowhere is this more seen than in the company's recent investment in sleep company Proper.
"(Cannabis) is also an input and its use case will go beyond people's stigmatic attitudes towards cannabis," said Wadhera. "At the core (correct) is a company that helps us fight this sleep epidemic. We believe that CBD and cannabis in general can play a huge role in addressing this in ways that traditional products couldn't. "
And what applies to sleep also applies to a number of other uses, Wadhera has said in the past.
Casa Verde has already invested heavily in the pure possibilities of cannabis. Investments include delivery, supply chain logistics, brands and retail.
But the health benefits cannabinoids could have for all kinds of diseases open up a much larger market – as does the broader consumer opportunities – should Congress comply with the wishes of more than 60 percent of American voters and legalize recreational cannabis use nationally .
And, as Wadhera told us in July, a Biden administration offers a potentially much more positive regulatory environment for the industry than the previous Trump administration.
“I think Biden will be very helpful. He's outlined many of the things he wants, and (while) he's not getting it to full legalization, he's certainly in favor of full decriminalization, which means states have full authority over what happens to their businesses and also with the rescheduling of cannabis from the current stage of Schedule 1, ”Wadhera had said. "All of this is going to be incredibly helpful, and will bring many more players who are comfortable investing in the space and possibly acquiring some of these companies as well."