Marijuana Business Magazine March 2019

Marijuana Business Magazine | March 2019 10 Q&A with managing partner at Casa Verde Capital Karan Wadhera By Lisa Bernard-Kuhn S ince closing its $45 million debut investment fund nearly a year ago, Casa Verde Capital has led a series of high-profile funding rounds for growing cannabis firms, luring co-investments from mainstream multibillion-dollar hedge funds and corporations. Co-founded by rapper Snoop Dogg, the West Hollywood, California-based fund focuses on “scalable, sustainable businesses run by great management teams,” said managing partner and co-founder Karan Wadhera, a former trader at Goldman Sachs. In October, the firm co-led a $50 million raise for seed-to-sale tracking firm Metrc along with Tiger Global Management, a hedge fund that boasts $23 billion in assets. Earlier in the year, Casa Verde teamed with Tiger on a $17 million funding round for compliance software company Green Bits. The fund also led an undisclosed investment with Big Tobacco’s Imperial Brands Ventures in British medical cannabis startup Oxford Cannabinoid Technologies. Marijuana Business Magazine spoke with Wadhera to get his insight on the changing investment landscape in cannabis and top considerations investors entering the space should keep in mind. What has been the fund’s guiding strategy? We see a lot of opportunity in many different sectors, but recently we’ve been excited by potential with delivery and compliance-software businesses. The strategy has really been to look at everything in the ancillary space and find the businesses solving long- term, structural industry problems while being as prudent as we can as it relates to valuation. What’s the makeup of your investor base? Our investor base is primarily comprised of family offices and high-net-worth individuals. Additionally, as interest in the industry grows, we are seeing a number of traditional institutional investors reaching out to learn more. As they see institutional funds and (corporations) participating in our transactions—Tiger Global with Green Bits and Metrc, Imperial Brands with Oxford Cannabinoid Technologies— it certainly sparks a necessity to learn more. Among your portfolio companies, can you offer some insight into what’s driving success at one or two of the firms? Our companies have been successful because they occupy critical positions in the industry and have man- agement teams that can seize on that opportunity. One portfolio company, Metrc, is the industry leader in track- and-trace technology for governments. As legalization drives demand at the government level, Metrc can feed off its prior experience with other states to offer govern- ment regulators a best-in-class compliance solution. Vangst, a recruiting and staffing company for the can- nabis industry, has seen tremendous growth through its Gigs platform, which solves the industry’s seasonal labor problem with an intuitive, scalable technology platform. This progress comes on the back of an established, tra- ditional recruiting business, which provides access to a massive pool of candidates and companies. Both of these companies sit in advantageous positions, with great teams and a string of successes that create a virtuous cycle for future growth. Money Matters | Investing & Finance Insight Karan Wadhera. Courtesy Photo