Cannabis Shot Startup K-Zen Lands $5M in Seed Funding

Underscoring the momentum behind the nascent cannabis beverage category, San Francisco-based startup K-Zen Beverages yesterday announced it has secured $5 million in seed funding from venture capital group DCM prior to its projected launch this summer.

The investment was revealed at CannTech, an invite-only cannabis technology summit hosted by DCM in San Francisco.

Speaking to BevNET, K-Zen co-founder and co-CEO Judy Yee, a former CMO at Earthbound Farm and former EVP of marketing at The Crystal Geyser Water Company, said the funds will be used to establish corporate infrastructure, educate consumers and build the brand.

The company did not share product details, though Yee confirmed it will be a 2 oz. shot that will feature “flavors and juices that people are familiar with.” The line, which will be marketed under a different trademark to parent company K-Zen, will feature a SKU that features just THC, the psychoactive compound from cannabis, and other varieties that feature both THC and the non-psychoactive compound cannabidiol (CBD).

Yee said the company’s decision was based on a desire “to be grounded within some of the existing consumers and need states” for cannabis.

“If you think about the current market today, it’s still dominated by people who are familiar or experienced (with cannabis),” she said. “In launching our first product, it’s important to address that existing consumer base. The 2 oz. form factor is a very familiar size for people who are looking for functional benefits, whether it’s energy, immunity, sleep or something else.”

Given the presence of THC, K-Zen’s products will be targeted to licensed marijuana dispensaries in California upon launching this summer. Yee said the line will also be available for purchase through on-demand cannabis delivery services such as Eaze, a smartphone app in which DCM is also an investor.

“We are looking to build out the portfolio of beverages by taking a category management approach,” she said. “We are really laying out that roadmap of developing all the different brand properties and formulations.”