Location: Los Angeles
Deal Count: 15
Los Angeles-based Casa Verde Capital has made 15 venture investments in the cannabis industry, according to Karan Wadhera, the firm’s managing partner. It was founded in 2015 by a team that includes the rapper Snoop Dogg, but it really started building out its portfolio in the summer of 2016, Wadhera said.
Like other US-based firms, Casa Verde invests in ancillary businesses, including Dutchie, an online-ordering platform, and Eaze, a cannabis-delivery company.
“The ancillary space presents some of the most compelling investment opportunities,” Wadhera told Business Insider. “These businesses are especially exciting as they can scale the quickest with the smallest amount of capital.”
In June, Casa Verde participated in a Series A funding round into Oxford Cannabinoid Technologies, a biotech startup researching cannabinoid medicines, along with the venture arm of the tobacco company Imperial Brands.
Location: New York
The New York City-based Altitude Investment Management has made 15 deals since the firm’s launch in 2017, according to Jon Trauben, a partner in the firm.
Altitude invests in ancillary companies, with a focus on data and analytics.
“Data and clarity in the cannabis market is lacking, so having a strong network to tap into is essential,” Trauben told Business Insider. “We think it’s critical to invest in the industry on a portfolio basis to diversify exposure and manage known and unknown risks.”
Altitude’s portfolio consists of startups across a range of verticals, such as PathogenDx, a DNA-testing firm geared toward cannabis; Flowhub, a point-of-sale-software service for dispensaries; and Green Flower, a digital-media outlet.
Deal count: 40
New York City-based Merida Capital has made 40 investments in 22 cannabis companies, Mitch Baruchowitz, a managing partner, told Business Insider.
Baruchowitz, a former corporate lawyer, founded Merida in 2016 after being involved in the cannabis industry since 2010. Unlike other firms on this list, Merida mostly invests in later-stage companies, rather than in seed rounds.
Baruchowitz believes two of the hottest areas to invest in the cannabis sector are agricultural technology and data analytics.
To that end, Merida has teamed up with private-equity fund Pegasus Capital to invest in Vividgro, a state-of-the-art lighting and growing system for indoor greenhouses.
Baruchowitz said data is going to be the “most disruptive” evolution of the cannabis market.
“When data becomes actionable, when the data sets become big enough, it’s going to be like whiplash for the market,” Baruchowitz said. “When data moves into the space, all of that historical or even instinctual behavior goes away.”
Merida has made multiple investments in New Frontier Data, a cannabis-industry analytics firm, along with compliance platform Simplifya, among other investments.
Location: Northbrook, Illinois
Deal Count: 14
Illinois-based Salveo Capital has signed 14 deals in nine portfolio companies in the cannabis industry since the firm was founded in 2016, according to Jeff Howard and Michael Gruber, Salveo’s managing partners.
Salveo’s portfolio includes ancillary startups like payroll firm Wurk and dispensary customer-relations platform Baker. It also invests in biotech startups like PathogenDx and Front Range Biosciences.
The partners said that in the run-up to full-scale legalization in Canada, the “floodgates of capital” have opened.
“VC’s need to be nimble and quick enough to execute in a generally oversubscribed fundraising condition before valuations increase,” they said.
Deal Count: 4
Lerer Hippeau is one of the few mainstream venture-capital firms to invest in the cannabis industry.
To date, the New York City-based fund — perhaps most well-known for its high-profile investments in digital-media companies like BuzzFeed and Axios and the shoe brand Allbirds — has invested in four cannabis companies.
“We started paying attention when Colorado became the largest state to fully legalized cannabis,” Eric Hippeau, one of the firm’s managing partners, told Business Insider in an email.
“We see the opportunity in investing in basic blocks establishing the infrastructure of the industry,” Hippeau said.
So far, the firm has invested only in ancillary companies, like Leaflink, a software platform for dispensaries; Herb, a digital-media company; and recruitment platform Vangst.
“Until cannabis is legalized at the federal level, we have decided not to invest in the product itself, with the exception of CBD products,” Hippeau said.
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Published: October 11, 2018
Founder & Interim Editor of L.A. Cannabis News