Cannabis-infused beverage brand Cann announced last week that it has received investments from a roster of high profile backers including Goop founder Gwyneth Paltrow; actors Rebel Wilson, Ruby Rose and Darren Criss; NBA point guard Baron Davis; singer Tove Lo and YouTuber Casey Neistat. The collective size of the new funding was not disclosed.
Based in Los Angeles, Cann produces several lines of ready-to-drink “social tonics,” including a core line which contains 30 calories, 2 mg of THC and 4 mg of CBD per 8 oz. can, a Lite line with reduced sugar, and a “Hi Boy” line containing 50 calories and 5 mg of THC per 12 oz. can. The brand is currently sold in over 200 licensed cannabis dispensaries throughout California, Nevada and Rhode Island and previously raised $5 million in seed financing earlier this year.
According to Cann co-founders Luke Anderson and Jake Bullock, the celebrity investors will not only help promote the brand but also work to normalize cannabis beverages as a socially-acceptable alcohol alternative. While many entertainers associated with cannabis culture, such as rapper Snoop Dogg and actor Seth Rogen, have lent their support to startups, Anderson said those backing Cann are largely mainstream tastemakers who will help break down stigmas and stereotypes.
“We knew that because our product looked and felt so different [from other cannabis brands], it appealed to consumers that aren’t necessarily going to the dispensary yet, so we wanted to find an army of people who did not carry that same stigma and could help advance the conversation,” Anderson said. “With this group, they’re all very, very savvy business people who have track records of successful investments, if not running their own companies successfully.”
Anderson said the impact of the investors is already being felt, noting that earlier this year Paltrow promoted Cann on her social media channels, prompting an influx of requests from consumers new to the category who asked why the product was not available at stores such as Whole Foods and Erewhon. As a startup, Bullock said that Cann does not currently have a sizable marketing budget, making the platforms of Paltrow, Wilson, Rose and others a valuable tool for growing brand awareness.
“That illustrates just how potentially powerful she can be if she can help us have the conversation with the people who are interested in Goop — affluent women who are looking for very interesting and cutting edge health and wellness items,” Anderson added.
Though dollar amounts of investments were not disclosed, Anderson said Paltrow owns a small but “non-trivial” stake in the brand.
But it’s not just consumers that Cann is hoping to convert through its influential backers. Anderson noted that the nascent THC-infused beverage market is still a small sliver of overall cannabis sales and dispensaries are often not equipped to upsell ready-to-drink beverages — making it difficult to scale the brand or receive strong in-store placement when many dispensaries lack basic tools such as coolers. Driving demand for the product could help the channel to pay more attention to the beverage space, he suggested.
According to Bullock, Cann is currently focused on expanding its footprint and increasing production in its existing markets and plans to open new facilities in Colorado, Illinois, Massachusetts and Washington over the next 6-8 months. Of the over 700 licensed dispensaries in California, he said Cann is only in about 200 but is targeting an additional 300 doors it hopes to add in the near future.
Currently, Cann is among the better selling cannabis beverage brands, with internal data showing high organic repeat customer rates — over 60% in the last month, Anderson said, adding that for many cannabis brands 20% repeat is considered strong. The company has sold over 2 million units so far this year, he said.
“Jake and I look at each other and we say this is impossible, but we have to keep pushing because we see how much people love it,” Anderson said. “Eventually, even the most stigmatizing trap shop-esque dispensary will, I think, see a similar sort of behavioral pattern.”