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This article was originally published on Benzinga, and adapted exclusively for HIGH TIMES.

Back in May, while chatting with Andy Williams, co-star of MSNBC’s The Pot Barons of Colorado and founder and CEO of Medicine Man Denver, Medicine Man Technologies and several other companies, Benzinga asked which were the largest challenges entrepreneurs in the cannabis industry face.

As with most insiders, he said the most difficult things are “keeping up with the ever-changing regulation” and raising capital.

On the compliance side, firms like Viridian Capital Advisors and Canna Advisors are helping companies better understand the law.

On the capital formation side, it’s firms like CanopyBoulder and iAnthus Capital Holdings that are helping to set the pace for the industry.

However, few organizations seem as well connected and as keen on making sizable investments as Casa Verde Capital, a venture capital firm that focuses on early-stage companies providing ancillary services to the cannabis industry.

In other words, Casa Verde (Green House in Spanish) invests in marijuana-related companies that never touch the plant; this category includes financial services, marketplace technology, packaging, media and compliance—but not things like dispensaries, cultivation or manufacturers.

Interested in the firm’s business model and its early investments in successful companies like Eaze, Merry Jane and LeafLink, Benzinga decided to reach out to its four founders, Karan Wadhera, Evan Eneman, Ted Chung and Calvin Broadus—AKA Snoop Dogg—and asked them to walk us through it all.

The first thing Benzinga wanted to know is how a rapper, known for his extravagant style, flamboyance and exceptionally “chill” approach to life, ended up partnering with corporate types including a former Goldman Sachs and Nomura Holdings senior executive (Wadhera), a man who had served as a director at PricewaterhouseCoopers (Eneman) and a serial entrepreneur (Chung).

The story started 20 years ago. Chung and Eneman were roommates at Wharton, the business school at the University of Pennsylvania. Around that same time, Chung and Wadhera started working for Snoop Dogg, as he gained independence as an artist.

“We were young members of the team helping him grow his business,”  Wadhera told Benzinga. “That was the first time we were all interacting and working together.”

After that, the Ivy Leaguers’ paths diverged, but they stayed in touch—with Chung becoming Snoop’s business partner in ‘99, and Wadhera and Eneman occasionally working on projects with the group. As time went by, the rapper and his business-savvy friends started to get into tech investing, providing seed financing for companies like Reddit, Slack and RobinHood.

“As we started to see what was happening in the cannabis space, we really understood there was a huge opportunity here,” Wadhera explained. “That’s when the decision was made: we were not going to be passive players in this industry; we were really going to look for proactive opportunities to get involved.”

“When you look at our profiles it seems a little mixed, but we bring a very diverse set of experiences and expertise to our process and approach, which, given the nature of the industry today, is a strategic advantage,” Eneman said.

“In any business, you have to feel you can really depend on the people around you, and the advantage of our business partnership is that we have been doing this together for a while,” Chung added. “We trust each other and are able to be honest with each other. When making decisions, I know a lot of what has gone into each of their thought processes and vice versa.”

The legal cannabis industry constantly battles with stereotypes, preconceptions, prejudice and unfounded fears. However, people involved in it prove once and again that this is a serious industry with the potential to create uncountable health improvements, as well as economic and societal benefits for a lot of people.

Snoop Dogg probably experiences a similar feeling. People often call him a “pothead” or a “stoner;” even a “weeaboo” (Google it, you’ll see). What they rarely see him as is the entrepreneurial-type. But this is certainly a misconception, given that the guy is worth more than $140 million.

“Snoop represents someone who stood by his morals, beliefs and principles about his association with marijuana,” Chung said. “And that has built a lot of brand equity, especially among the cannabis community. As we started expanding Snoop’s financial portfolio and investing in things he liked, it made sense to get further involved in the space.”

Getting into Casa Verde’s business, we asked why the firm invests only in companies that do not touch the cannabis plant. This is not an unusual approach, but motivations differ widely.

There are two reasons to avoid plant-touching businesses, managing partner Karan Wadhera told Benzinga. First, because of the “nebulous/uncertain/unclear” nature of federal regulation, investors would prefer to avoid any additional risk beyond the investment itself. The second component revolves around scalability, meaning startups that aren’t burdened with the licenses and regulations required by those who touch the plant.

While enticing, Casa Verde’s description did not seem very different to that of other major VC funds in the space so far. So, we asked what makes the firm different from others.

“Our differentiating factor comes from how broad our internal ecosystem is. While we have an investment firm, which is specifically focused on deploying capital into the space, we also have other lines of partner-businesses that support the ecosystem as well,” Eneman answered.

Other businesses managed by Casa Verde’s partners include a marketing and creative agency called Flower Shop, an audit, tax and advisory business called ELLO, a media brand called MERRY JANE Media, in addition to Snoop Dogg’s weed brand, Leafs By Snoop, which is licensed by Canopy Growth in Canada.

This diversified exposure to the cannabis industry’s sub-sectors provides Casa Verde with unique insights “beyond just wearing the investor hat and looking for strong returns,” Wadhera argued.

“I think we get a chance to understand the real pain points of the industry through these different verticals, but it also ends up being a really unique, interesting source of deal flow because, between all these elements, we’re just in touch with so many different parties, we end up attracting a lot of great investment opportunities,” Eneman added.

Moving on, Benzinga enquired about Casa Verde’s investment approach. Given that, since inception, the firm has funded about eight companies, how had they selected them?

Casa Verde typically invests in fairly early stages of businesses. So, rather than focusing on the company per se, they look at the entrepreneur behind it.

“These companies are in such an early stage of development that whatever you think the approach is at this moment could change dramatically,” Wadhera explained. “So, it really is about finding individuals who can steer a ship through rough waters and complicated scenarios.”

Once this “first line of defense” is passed, the venture capitalists do look into the companies in greater detail, jumping into the financials and understanding their team members, as well as doing a lot of diligence on who their stakeholders and customers are.

When assessing a potential opportunity, they’re looking for companies that they think can grow their business to be at least 10 times larger than they are today, they added.

Having a clearer understanding of where Casa Verde is investing and why, there was one last thing left to know: Where is the money coming from? How is the firm “papering up,” if you will?

As anyone familiar with the cannabis industry knows, most funds come from high-net-worth individuals and family offices—people who don’t have to justify their picks to outside investors, like hedge funds do. However, in some deals, the firm has also seen institutions providing capital.

“For the most part, we’re building the framework for what institutional capital looks like in this industry; we are establishing ourselves as the institutions, and we’re structuring our investment and our communications in a way that—we’re hoping—we are able to bring a little more institutional capital into our firm and industry in the future,” Wadhera concluded.

More From Benzinga:
A Cannabis Wonderland? This Company Bought A Whole Town In California To Create A Marijuana Tourism Destination
Largest Marijuana Dispensary Group In The US Now Takes Debit Payments
How Public Relations Firms Are Capitalizing On The Marijuana Green Rush

You can keep up with all of HIGH TIMES’ marijuana news right here.