By Steve Gelsi
Cann has landed a $27 million Series A venture financing, as the cannabis beverage company looks to grow its distribution to more U.S. states in 2022, the company said Tuesday.
Venture capital firm Imaginary Ventures led the Series A round, with cannabis company Green Thumb Industries /zigman2/quotes/206151134/delayed CA:GTII +2.15% /zigman2/quotes/200716694/delayed GTBIF +1.07% as an investor.
Jake Bullock, co-founder of Los Angeles-based Cann, told MarketWatch the funding ranks as the biggest Series A financing of a venture-backed cannabis beverage company.
The fruit-flavored drinks are aimed at social drinkers, and contain micro doses of THC and CBD — much less THC than other cannabis beverages, he said. The intention is to aim at the much larger alcoholic beverage market that measures in the tens of billions.
“We’re positioned as an alcohol substitute,” Bullock said. “We’re different from most cannabis brands. We’re going after the person who’s going with alcohol and convince them to drink a little less alcohol and try something that’s comparable to a beer or wine buzz.”
The company boasts a long list of celebrity investors, including Rosario Dawson (who is also a board member), Nina Dobrev, Sara Foster, Paul Scheer, Adam Devine, Gwyneth Paltrow, Baron Davis, Rebel Wilson, Kate Hudson, Darren Criss, Casey Niestat, Tove Lo, and Bre-Z.
In 2022, Cann expects to expand to Arizona and Nevada, as well as the Canadian provinces of Ontario, British Columbia and Alberta.
It’s currently selling drinks in Illinois, California and Massachusetts. It’s looking at further expansion in New York, New Jersey and Connecticut in the coming year.
Cann inks manufacturing partner agreements in every state by shipping its syrup with no cannabis in it to its partners and they batch it in with their THC and CBD.
“Our core product is for first timers and people who have had a bad experience and maybe are getting back to it,” said Bullock. “It truly is a new class of Social Tonic, with juice flavors such as Italian blood orange — all natural flavors and no preservatives.”
Cann’s onset time is about 10 minutes to 15 minutes – shorter than most edibles. Cann products contain micro THC oil droplets emulsified into liquid, which makes it consistent throughout the beverage and allows more rapid absorption so you feel it faster. You also stop feeling it – the offset time – similar to the feeling you get drinking a beer.
Six packs of Cann beverages containing THC sell for about $18 in California and Nevada.
The company has about 45 employees now and plans to hire more people in 2022.
Green Thumb Industries is working with Cann in the Illinois market as a manufacturer and distributor.
Natalie Massenet, co-founder and partner of Imaginary Ventures, led the funding for the New York-based firm.
As part of its expansion into Canada, Cann is teaming up with Truss Beverage Co., a joint venture between MolsonCoors Canada /zigman2/quotes/205165133/composite TAP -1.93% and Hexo Corp. /zigman2/quotes/206508254/composite HEXO -3.65% /zigman2/quotes/200008967/delayed CA:HEXO 0.00% .