Craft marijuana brand Flow Kana has raised a new investment round of $22 million, bringing its funding total to $50 million.

Its latest financing is one of the largest Series A rounds for a cannabis company to date, though deals of this size are becoming more common.

Hundreds of millions of VC dollars flow into the marijuana sector every year, as fledgling startups chase funding to become the giants of their industry.

Tech investors are seeing green in the marijuana industry.

Flow Kana, a craft marijuana brand based in San Francisco, has closed a $22 million round of financing to scale the supply chain across California. Combined with earlier funding from notable angel Roger McNamee, an early Facebook investor who served as an advisor to Mark Zuckerberg, the raise brings its total funding to $50 million.

It's one of the largest Series A rounds for a cannabis company to date, according to data and research firm Pitchbook, though deals of this size are becoming less rare.

Big money is coming for the emerging marijuana sector, which analysts say could eclipse soda sales by 2030. Marijuana is legal in nine states and Washington, DC.

Flow Kana was founded as a boutique delivery service in 2014. The company sources its marijuana from small farmers who grow outdoors without using pesticides, and is aimed at helping those farmers compete with Big Cannabis in the era of legalization.

This year the company opened a massive marijuana processing manufacturing hub on the site of a former winery in Northern California. Much like a winery that hosts tours and tastings, the Flow Cannabis Institute will eventually build experiences around the operation. Visitors will be able to tour the facilities where workers test, trim, process, and package marijuana for distribution; learn about the plant in seminars and pairing dinners; and stay on-site at a pot-friendly bed and breakfast.

Hundreds of millions of venture dollars flow into the marijuana sector every year, as fledgling startups chase funding to become the giants of their industry.

Flow Kana founder and CEO Mike Steinmetz. Flow Kana

Mike Steinmetz, founder and CEO of Flow Kana, said when he started raising seed money back in 2015, an investor writing a check for $50,000 seemed like "a big win." As investors warm to the marijuana industry, those check sizes are growing bigger.

Still, Flow Kana hasn't raised from any big-name firms on Sand Hill Road. While many VC funds may want to invest in the marijuana industry, their limited partners (LPs) — typically large, institutional pension funds or insurance companies — won't take the risk because cannabis is still considered illegal by the US federal government.

Steinmetz focused his fundraising efforts on marijuana-specific funds, family offices, and angel investors, though he would have liked to raise from Silicon Valley firms.

"Most VCs were locked behind their LPs," Steinmetz said.

Gotham Green Partners, a New York-based private equity firm focused on deploying capital into promising marijuana startups, led the Series A round with a $15 million investment. Poseidon Asset Management and Salveo Capital also participated.

Big money is coming for the marijuana industry

American venture capital put $303 million into 79 marijuana industry deals in 2017, and 2018 is on pace to break last year's record. Most of the top venture-backed companies in the space are working on biotech solutions or ancillary services, like software platforms and payroll management. These deals are generally considered safer bets for investors, because the companies don't touch the marijuana plant.

In April, Tiger Global Management, a New York City-based investment firm with $22 billion under management, led a $17 million investment into software maker Green Bits. The firm's involvement was considered by some as a sign that big money is starting to take the marijuana sector seriously, in spite of the federal government's stance.

It may take longer for institutional dollars to reach Flow Kana, which handles the plant but does not grow it. The company plans to use the latest round of financing to increase production at the Flow Cannabis Institute and build distribution hubs.