Tiger Global and Snoop Dogg VC firm back pot start-up

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Snoop Dogg smokes while performing at the 2012 Coachella Valley Music and Arts Festival in Indio, California April 15, 2012. The Coachella festival, which commenced in 1999 on the desert lawns of the Empire Polo Club in Indio, California, has grown from 25,000 attendees overall to 75,000 people a day, and has become an important platform for alternative rock, rave and electronic music acts. REUTERS/David McNew (UNITED STATES - Tags: ENTERTAINMENT) TEMPLATE OUT - GM1E84G15QK01

Metrc, which provides ‘track and trace’ systems to cannabis industry, raises $50m

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Tiger Global, the hedge fund and venture capital group led by Chase Coleman, is leading a round of fundraising for Metrc, a cannabis regulatory compliance start-up, becoming one of the biggest-name investors to pile into the marijuana industry. Tiger is leading the $50m round jointly with Casa Verde Capital, a venture capital firm that invests in businesses related to the cannabis industry and which counts the rapper Snoop Dogg among its four founding partners. Casa Verde’s investment in Metrc, a “track and trace” system provider that follows cannabis plants from the seed to when it reaches the consumer in order to comply with government regulations, is its biggest yet. The funding comes as interest in cannabis shares on Wall Street has increased in recent months. Tilray, a Canadian company, in July became the first to go public on a US exchange. Its shares have since risen to more than $100 a piece from an issue price of $17. Part of the allure is the industry’s steady march further into the mainstream and the accompanying growth prospects. Coca-Cola is among the well-known consumer brands that have signalled interest in the market for cannabis-related products. But many investors are opting to find ways to capitalise on the trend by investing in ancillary businesses, which may have more scope for growth and are less likely to fall afoul of federal regulations like a cannabis supplier company might. Marijuana remains illegal at the federal level in the US, despite rising popular support for legalisation. Tiger, which is investing in Metrc through its venture capital arm, is among the highest profile asset managers to have dabbled in the industry. Veteran investor Leon Cooperman has put some of his personal fortune into marijuana start-ups including CannTrust and Green Thumb Industries. Metrc said it has tracked more than 20m plants and registered more than 85,000 users. The company was founded in late 2013 inside the Florida-based technology company Franwell to provide services to the Marijuana Enforcement Division of Colorado, which was the first US state to legalise the use of recreational pot. It services 11 states and Washington DC, and most recently scored contracts Massachusetts and California. “The advent of seed-to-sale tracking and the richness of the data it yields has made the cannabis industry the most organised and transparent in the world,” said Karan Wadhera, the managing partner of Casa Verde. “We’re seeing a level of insight in the industry we’ve never seen in any other industry.”

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Metro will use the new money for investing in operating technology, hiring more staff and for working capital, said Mr Wadhera, who predicted continuing growth and — eventually — full legalisation of cannabis in the US. “It’s a matter of time,” he said. “It is also one of the few issues that seems to be speaking to both sides of the aisle, which is rare these days. I think all the support from a political perspective has been fairly positive, and support from the public continues to be at record levels.” Tiger, which declined to comment on the fundraising, is also invested in Juul Labs, the San Francisco-based ecigarette company that was valued in July at about $15bn. The investment firm recently raised $3.75bn for its latest venture capital fund.

 

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