Casa Verde Capital, the investment firm established with the support of cannabis enthusiast Snoop Dogg (also known as Calvin Broadus), has successfully secured $100 million for its second fund, as indicated in filings with the SEC.

Karan Wadhera, the fund’s managing director, refrained from providing comments for this report; however, the capital raise occurs as the cannabis market appears ready for renewed growth.

Wadhera previously explained that the previous market correction in the cannabis sector shared similarities with the dot-com bubble of the late 1990s, characterized by excessive enthusiasm—particularly from publicly traded companies—and speculative trading leading to inflated valuations. He noted these valuations were based on projections far into the future, coupled with substantial revenue multiples. “The situation became excessively optimistic before ultimately collapsing, reaching its peak around April or May of last year. Subsequently, stock prices began to decline, and publicly listed companies experienced the most significant impact,” Wadhera stated in a July interview with TechCrunch. 

The industry has since demonstrated a strong recovery.

“Currently, over four months into the COVID-19 pandemic, cannabis has consistently proven to be a resilient, non-cyclical industry. It has been classified as an essential business throughout the United States, with record sales reported in March, April, and May, a trend that has persisted,” Wadhera mentioned in July. “Furthermore, as governments seek to increase tax revenues, the impetus for cannabis legalization may intensify, which would be highly beneficial for the industry.”

While the specific investment goals for the new venture capital fund remain undisclosed, this latest fundraising effort more than doubles the size of Casa Verde’s initial investment fund.

Since its launch in 2018 by Broadus, Wadhera, and Ted Chung—co-founder of Cashmere Agency and Stampede Management—the firm’s debut fund has navigated a volatile market cycle of expansion and contraction.

Despite these market fluctuations, Casa Verde has cultivated a portfolio valued at a minimum of $200 million, according to sources familiar with the firm. This value has been realized through various special purpose vehicles and supplementary fundraising initiatives alongside the primary fund.

An analyst report from Cowen, an investment bank, forecasts that the overall market for cannabis and cannabinoid products will reach $34 billion by 2025.

The investment bank anticipates approximately 30% growth in their total addressable market estimates, driven by the recent passage of adult-use cannabis legalization measures in Arizona, Montana, New Jersey, and South Dakota.

Casa Verde has consistently maintained a comprehensive perspective on the potential market size for cannabis and its related compounds.

This is particularly evident in the firm’s recent investment in Proper, a sleep-focused company.

“Cannabis serves as a component and its applications extend beyond conventional perceptions,” Wadhera explained. “At its foundation, Proper aims to address the widespread sleep epidemic. We believe CBD and cannabis, in general, can offer a more effective solution than traditional products.”

Wadhera has previously indicated that this principle applies to numerous other potential applications as well.

Casa Verde has already made substantial investments across various segments of the cannabis industry, including delivery services, supply chain logistics, branding, and retail operations.

However, the potential health benefits of cannabinoids for a wide range of conditions, coupled with broader consumer opportunities should federal legalization of recreational cannabis occur—supported by over 60% of American voters—represent a significantly larger market.

Moreover, as Wadhera conveyed in July, a Biden administration could foster a more favorable regulatory climate for the industry compared to the previous administration.

“We anticipate that Biden’s policies will be supportive. He has outlined his objectives, which include full decriminalization and rescheduling cannabis to a lower classification than its current Schedule 1 status, while also granting states greater autonomy over their cannabis businesses,” Wadhera stated. “These changes would encourage increased investment and potential acquisitions within the sector.”