Snoop Dogg's venture capital firm is leading an investment in a cannabis tech company

Jeremy Berke

Snoop Dogg's fund is making big moves in the cannabis space.Richard Shotwell/AP

A cannabis-specific venture capital firm that counts Snoop Dogg among its partners is investing in a Toronto-based cannabis tech company.

Snoop Dogg's fund, Casa Verde, led a $2 million seed round in Trellis, a cannabis inventory management firm. Trellis develops software to help dispensaries and other plant-touching businesses comply with regulatory requirements, including seed-to-sale tracking. 

Casa Verde makes early-stage investments in cannabis companies that do not touch the plant, but rather provide ancillary products and services to the emerging industry.

"We are at a pivotal point in the industry where the market is expanding with new regulations and operators are experiencing growing pains. This makes it all the more important to have strong tools and procedures in place," Pranav Sood, the CEO of Trellis said. "We are thrilled to have been able to attract such a strong team of beta clients, investors, and advisors to support us in our vision."

Trellis works with cannabis clients in both Canada and California and plans to expand to more states that have legalized cannabis for recreational and medicinal use. 

"As cannabis legalization sweeps the US, the compliance burden for cannabis-related businesses will become more and more rigorous," Karan Wadhera, a Goldman Sachs alum, and the managing partner at Casa Verde said. "We have been searching for companies with an elegant solution to address the growing pains of the industry."

"That is exactly what Pranav and his team have built with Trellis," Wadhera said.

Gateway, a California-based incubator for cannabis startups also provided additional funding, as well as Argonautic Ventures and One Gun. 

Wadhera previously told Business Insider in an interview that investing in ancillary startups that provide software and tech services to cannabis companies is one of the "most exciting" areas of the industry, as these companies can "actually scale" and aren't subject to the often byzantine regulations that plant-touching businesses are.

Cannabis is considered an illegal drug by the federal government, although a number of states have legalized the plant for recreational and medicinal use. Attorney General Jeff Sessions, a noted opponent of cannabis, has threatened to crack down on the nascent industry. 

6 ways new federal bills would protect California cannabis consumers, businesses

March 30, 2017 

Updated 11:12 p.m.

Hemant Lata, left, and Suman Chandra work at a federally-approved medical marijuana facility at the University of Mississippi in Oxford in 2014. (File photo by Lance Murphey, The New York Times)

Federal legislators are working on a cluster of proposed laws aimed easing the growing conflict between state and federal marijuana laws, with a number of protections and new regulations that could impact cannabis consumers and businesses in California.

Cannabis remains illegal at the federal level, though medical marijuana is now legal in 28 states and recreational cannabis is allowed in eight. So even though state law says Californians can now smoke weed and give some to a friend, they still risk criminal prosecution by federal authorities and can be denied benefits such as subsidized housing. People who own cannabis-related businesses also face federal raids and can’t access most banking services or claim standard tax deductions. And researchers also have a tough time getting access to study cannabis because the plant remains illegal under federal law.

Oregon Democrats Sen. Ron Wyden and Rep. Earl Blumenauer aim to change all of that in one fell swoop with the “Path to Marijuana Reform,” a package of bills introduced Thursday in both houses.

Also included in the package is the reintroduction of legislation from Rep. Jared Polis, D-Colorado, to regulate marijuana like alcohol.

The bills would remove marijuana from a national registry of controlled substances and add a slew of new protections for consumers and industry workers. Wyden said the new rules could spur industry growth and investment, which have been hampered by the looming threat of a federal crackdown – a threat that's gained traction since long-time marijjuana opponent Jeff Sessions became Attorney General.

The bills would also create a new federal tax on all cannabis products that would start at 10 percent and escalate to 25 percent. And marijuana businesses would be required to get federal permits to operate, with new rules on advertising, labeling and more.

The proposed bills drew quick praise from supporters of marijuana legalization, who argued that such reforms will bring federal marijuana laws more in line with public opinion and state policies.

“States are clearly realizing the benefits of regulating marijuana, and we are glad to see a growing number of federal policy makers taking notice,” said Aaron Smith, executive director of the National Cannabis Industry Association.

Opponents of legal marijuana expressed concern about Wyden and Blumenauer’s legislation, claiming the emerging industry is focused on profits and not public health.

“We need to end, not expand, the special interest big marijuana lobby,” said Kevin Sabet, a former White House drug policy senior adviser who now heads Smart Approaches to Marijuana.

Most policies in the bills have been proposed previously in some form, though they’ve never gotten past initial committee hearings. And that was before Republicans controlled both the House and the Senate.

But Wyden and Blumenauer pointed out in a joint statement that public support for cannabis legalization has never been higher, with the Democrats’ package of bills drawing early support from both sides of the aisle.

Here are six ways the federal bills would impact Californians and residents in other legal weed states if they become law.

1. Add criminal protections: Federal agents could no longer arrest people who are complying with their state’s cannabis laws and slap them with fines or jail time. The feds also couldn’t raid state-legal pot shops and seize their assets. No one could be deported or denied entry to the country for consuming weed in state where it’s legal. And Native American tribes would be protecting from punishment under federal marijuana laws.

2. Open bank access: Banks and credit card companies that handle marijuana funds would get immunity from federal criminal charges. That should help the industry move away from operating all in cash, since financial institutions would no longer have to worry about being penalized for money laundering if they take on cannabis clients.

3. Remove obstacles for research: A new process would make it easier for researchers to study medical marijuana by reducing approval wait times, costly security measures and layers of review that experts say stifle the number and quality of studies now taking place. And once researchers get approval, it would be easier for them to access marijuana for use in their studies. That should increase the volume of rigorous trials involving cannabis.

4. Eliminate tax restrictions: Marijuana retailers would be able to claim tax deductions and credits like any other business. That’s because the bills would make an exception for marijuana in IRS tax rule 280E, which says businesses dealing in Schedule I or II substances can’t write off common expenses such as rent, utilities or advertising. That should save businesses significant money each year.

5. Clear criminal records: Anyone with a federal charge for a marijuana-related activity that was legal in their state at the time or who was charged with possessing an ounce or less of marijuana could petition to have their records cleared. California’s Proposition 64 included a similar provision, though it could only apply to state charges.

6. Allow for federal benefits: People in legal weed states could no longer be drug tested for marijuana when applying for a federal job or denied access to subsidized housing. College students couldn’t be turned down for financial aid because they have minor marijuana offenses on their record. And health care workers at Veteran Affairs clinics could recommend medical marijuana to veterans.

Staff writer Alicia Wallace contributed to this report.

The Marijuana Show Could Become The Shark Tank for Ganjapreneurs

FRIDAY, AUGUST 12, 2016 AT 7:41 A.M.

BY ALEX ZARAGOZA

Spirits were high at the Southern California Cannabis Conference & Expo, held in San Diego on Aug. 7. It wasn’t the crowd you might expect at a cannabis convention. While Sublime songs did make the occasional appearance, most gathered were there to talk the big business of marijuana.

The Amazon reality show seeks the next marijuana millionaire.

The expo brought out dozens of cannabis-based businesses, some so huge they trade on the New York Stock Exchange, such as Medical Marijuana Inc., whose assets total more than $216 million, according to its 2015 annual report and whose main distributor, HempMeds, had a huge booth at the conference. Others are so small they consist of a mom and daughter cooking edibles in their kitchen and packaging them to sell at dispensaries. 

Seven of those budding cannabis entrepreneurs made their way to the main conference stage to pitch their business idea to Karen Paull, co-creator and co-producer of the Amazon reality competition The Marijuana Show, dubbed “Shark Tank for Ganjapreneurs.”

The audition was the first held in California, which still prohibits the use of recreational marijuana but has legalized the use of medical marijuana, albeit with various restrictions. In Denver, which is considered the epicenter of the marijuana industry due to its legal status, 200 contestants auditioned.

In the first two seasons, investors featured on The Marijuana Show bankrolled contestants with more than $18 million. This season, up to $20 million is up for grabs.

Paull and her partner, Wendy Robbins, created the show after hearing at a dispensary event viable business ideas that they thought they could help get off the ground with some consulting.

Karen Paull and her partner, Wendy Robbins, hope their marijuana business reality show will become “Shark Tank for ganjapreneurs.”

“We have successful business backgrounds, and we thought maybe we can help consult entrepreneurs out of the kindness of our hearts; give them some guidance,” says Paull, who served as the CEO of Sales Guru and VP of sales at Snapfish. Robbins is the co-inventor of the Tingler head massager as well as a two-time Emmy winner. She appeared on the show Homemade Millionaire with Kelly Ripa and has been a producer on Broadway.

“We typically offer free advice anyway,” Paull adds. “But what that morphed into was the concept of a reality show. We’ve been called the Godmothers of Pot before, or the Godmothers of Weed, and frankly, we’re a couple. We don’t have kids, so a lot of times the people that come through our show feel like our children that we get to coach and mentor and get to that stage where they’re ready to pitch investors.”

Hopefuls sat among a sparse audience and watched a sizzle reel showing past contestants walking away with the green they’ve been dreaming of. In one scene, a man triumphantly held up his dog inside a limousine and proclaimed, “Charlie! We’re rich, buddy!”

Deborah Smith, left, and Autumn Leilani, a mother-daughter team who auditioned for The Marijuana Show

Among the auditioners was mother/daughter team Autumn Leilani and Deborah Smith. Leilani, a DJ living in West Hollywood, and her San Diego–based mom, run Pop’s Potions. It's a company they started after the death of Jim, Leilani's father and Smith's husband. They concocted different edibles and cannabis oils in their kitchen to ease Jim’s pain resulting from cancer caused by exposure to Agent Orange during the Vietnam War.

After his death, the women decided to create their company so they could help others in pain through cannabis-infused candy and food, including truffles, beef jerky, lollipops and gummy bears. They’ve expanded their model to provide branded homemade edibles and packaging for other cannabis-based businesses.

The duo came to the conference to see if they could take their homegrown business to the next level. They say they believe that auditioning for The Marijuana Show can make that happen.

“It was one of those things where we said, ‘We should do this!' Why wouldn’t we?” Leilani says. “This is our heart and soul. This is our passion. I would love to just see us be one of the biggest edible companies out there as well as a main manufacturer for good, legit brands. There are edibles out there that are just garbage. We put pride in every single piece of candy that we produce.”

As auditions began, Paull picked up the microphone, angling her face to the cameras capturing the auditions, and greeted everyone. “We’re looking for the next marijuana millionaire, and they can be right here in this audience!”

While your neighborhood weed dealer may still be raking in enough cash for a sweet pre-owned Audi, those auditioning for The Marijuana Show know there are millions to be made in the legalized marijuana industry.

Marijuana industry investment and research firm ArcView Market Research reported that legal pot sales are expected to hit $6.7 billion in 2016 alone — a 25 percent jump from 2015. By 2020, that number is expected to be $21.8 billion. In California, sales at dispensaries were $2.7 billion in 2015, with an estimated growth to $6.6 billion in 2020. Los Angeles has more dispensaries than Colorado and Washington combined.

Still, because of the iffy legal status of marijuana use across the country, it’s a market fraught with potential legal issues. But Paull and Robbins want to get people there.

“We have people pitch us that aren’t going to necessarily be on the show,” Paull says. “But they will become friends or advocates, collaborate or sell sponsorships with us and everyone in this community, because cannabis is trying to become legalized. Everybody needs to help each other. It’s like a paradigm. The old culture is us against them. The cannabis culture is that we’re all in this together.”

A large investment would be life-changing for people like Leilani, who is attempting to grow her business from seed to bank.

“I would probably pee myself [if we got a major investor], and then there would be a big party followed by that, and then it would make all of my dreams come true,” Leilani says. “It would put me where I know I need to be. It would be buckle-down time. We’d get this in gear and get it to the next level.”

The Marijuana Show Could Become The Shark Tank for Ganjapreneurs

From Wall Street to moms, business of marijuana attracting diverse set of entrepreneurs

BY KIRSTIN COLE

SYOSETT, Long Island (PIX11)– Rachel Jones, 24, is a stay-at-home mother from Syosset, Long Island who quit her six-figure job and started her own business hoping to ride the marijuana wave.

“I see myself as an entrepreneur,” Jones said.

Her business experiment Juana Box launches in just a few weeks, shipping boxes of smoking accessories– glass pipes, rolling papers, vaping pens– across the nation.

However, the one key ingredient missing is marijuana.

This new mom currently markets tobacco use only to those over 19, but she’s poised to blow her business, partnering with marijuana growers and dispensaries, anticipating recreational pot will soon be sold in New York and across the U.S.

“In a few years this could be a factory and I could be hiring other stay-at-home mothers,” Jones said.

From one woman entrepreneurs to well-funded multi-million dollar businesses, marijuana is no longer just a pipe dream. From growers to CEO’s, this business, estimated to be at $46 billion by 2016, is expected to grow 700 percent over the next five years.

For more see: pix11.com - From Wall Street to moms, business of marijuana attracting diverse set of entrepreneurs

10 Cannabis Startups That Have Raised Over $1 Million (Besides Privateer)

Carol Tice

Contributor

Legal cannabis gained a higher profile recently, after Seattle pot-investment firm Privateer Holdings closed a $75 million funding round. The deal included the first mainstream venture capital involvement in the sector, from Peter Thiel’s Founders Fund.

But there’s plenty of other VC interest in legal weed, and it’s likely just the beginning of investor interest in “potpreneurs.” Quite a few legal-pot startups are publicly traded penny stocks, so everyman investors can get a piece of the action, too.

At first, many VC investors wanted to remain anonymous with their pot investing, but now more are coming out of the shadows and publicly announcing their interest in the sector.

To give you an idea of the types of marijuana startups that are attracting venture capital, here are a dozen other cannabis startups that have raised over $1 million to date (data compiled by this reporter from CB Insights, the MoneyTree Report by PricewaterhouseCoopers (PwC), Crunchbase, and company research):

Leafline Labs ($12.4M) — This Minneapolis-based medical-marijuana startup has the involvement of several members of the family that owns nursery company Bachman’s Inc. Leafline is one of only two cannabis companies that Minnesota has licensed to operate in the state. Leafline raised its funding from 113 individual investors.

Four Twenty Investments ($10M) — A private investment firm based in Toronto, Four Twenty did a $10 million debt financing in December. The firm invested an equal sum in Nhale, a publicly traded grow-technology company based in Houston that plans to acquire other pot startups.

Palliatech ($10M) — This New York City producer of marijuana-based pain medicines is also a grower and distributor. PwC reports funders include Russian VC firm Gruppa Sputnik OOO.

Vida Cannabis ($9.39M) — The Ottawa-based pot producer most recently raised nearly $5.8 million in a private placement last July. Part of the funding went to purchase a secure, hydroponic production facility in Nova Scotia.

CannTrust ($3.79M) — A Canadian medical cannabis producer, CannTrust is owned and operated by pharmacists. It raised $1 million of its funding this month, CB Insights reports.

MedMen ($3.75M) — This provider of turnkey management services to the legal-pot industry is based in Los Angeles. MedMen raised all of its funding in November, to expand operations to Nevada and Illinois. Backers included Florida-based N Squared Management.

Agricare ($2M) — Chicago-based Agricare raised its funding in October, though funders weren’t disclosed. Besides its hometown, the company is also in the licensing process to set up operations in Peru, Ill.

Eaze ($1.5M) — Funding for this San Francisco pot-delivery app came from technology microfunder Fresh VC in November.

Aquarius Cannabis ($1.16M) — This marijuana branding company raised most of its funding from angel investors at its October launch, CB Insights reports. It’s based in the L.A. suburb of Woodland Hills, Calif.

Privateer holdings management

MassRoots ($1.1M) — A social network for the cannabis community, MassRoots most recently raised $500,000 in September. Funders in past rounds include The ArcView Group. which runs a website platform for facilitating cannabis investment, and Dutchess Opportunity Fund, a fund of global investment firm Dutchess Capital.

This list is far from comprehensive — it’s just a sampling of the types of pot-related businesses that are interesting investors at this point.

It’s notable that most of these startups aren’t based in the traditional VC hubs of Boston or Silicon Valley. Indeed, many pot startups are based in Canada, where medical marijuana is already federally legal.

10 Cannabis Startups That Have Raised Over $1 Million (Besides Privateer)

Medical marijuana brings "green rush" to Colo.

Colorado's thriving medical marijuana business isn't just named for the color of today's green, potent pot. It's the color of the money being made in the medical marijuana industry. Steve Kroft goes to the Rocky Mountain state to report on a business that's legal there and 16 other states, but in the eyes of the federal government is still as illegal as dealers selling heroin or LSD. "Rocky Mountain High" will be broadcast on 60 Minutes Sunday, Oct. 21 at 7:30 p.m. ET and 7:00 p.m. PT.

Kroft goes to Denver to visit a few of the city's 204 medical marijuana dispensaries -- shops so numerous, they outnumber Starbucks and McDonald's combined by nearly threefold. The state of Colorado, with five million people, boasts a total of 537 medical pot dispensaries and more than 100,000 authorized medical marijuana patients.

Highly regulated shops sell medicine patients can smoke with names like Jack Frost and Biodiesel; edible versions of cannabis are also available, from the newfangled, like ice-cream, sparkling sodas and chocolate, to old standbys like cookies and brownies. A webcast to go live on Sunday evening on 60MinutesOvertime.com will feature a whole segment on the various kinds of marijuana-infused edible products Kroft found.
The rush, like those for silver or gold so long ago, is attracting investors, or as some call them, "ganjapreneurs." Kristi Kelly came to Colorado to make money on marijuana. "There's not a lot of opportunities in any one lifetime where you can be part of something from such an early stage," she tells Kroft.
The federal government has done little in the state to interfere in the booming trade. And even if it chose to, the sheer number of dispensaries would present a daunting challenge. The Justice Department, however, has warned that financial institutions could be prosecuted for handling money from such businesses. This is a situation ganjapreneurs cannot tolerate much longer as their businesses grow larger.

This past week, a federal appeals court in Washington held a hearing on whether to change marijuana's status under the Controlled Substances Act. Medical marijuana advocates are suing to remove cannabis from the Schedule One list and reclassify it as a drug that could be prescribed by physicians.

Meanwhile, Colorado could become the first state to legalize pot. A referendum is on next month's ballot that if passed, would legalize recreational use of marijuana with regulations.

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