Cannabis-infused “social tonic” maker Cann has partnered with Swedish pop star Tove Lo for its latest product launch: Peach Passionfruit Maté, a limited edition caffeinated beverage infused with THC.
The new product represents a step into a new functional space for Cann, which has mainly developed innovations for its low-dose THC and CBD-infused beverages around pack size and format. The drinks are available in 12 oz. tall cans (in line with its Hi Boy line) and contains 65 mg of caffeine sourced from maté and 5 mg of THC. The retail price for a 4-pack is $20.
Speaking with BevNET earlier today, Cann co-founder Luke Anderson said Peach Passionfruit Maté was developed in partnership with singer Tove Lo, who is an investor in the company and was Cann’s first celebrity ambassador. Lo, who is known for her albums Blue Lips and Sunshine Kitty (as well as co-writing the Grammy nominated Ellie Goulding song “Love Me Like You Do”), selected the flavor combination. As Anderson noted, peach and passionfruit are “delightfully playful sexual innuendos, which is her brand.”
The line also marks Cann’s first retailer-exclusive product via a partnership with California cannabis dispensaries Sweet Flower (Los Angeles) and Airfield Supply Co. (San Jose). Peach Passionfruit Maté will be available for at least a year, Anderson said, but the company may look to expand the product into a full caffeinated line in the future.
Modeled after maté vodka cocktails, popular in the German club scene, Anderson said he had long wanted to produce a beverage using maté. While Cann’s product is not the first THC-infused drink on the market to feature caffeine (several infused cold brew coffee brands exist, including Somatik), there have been few THC-centric energy drink plays. For Peach Passionfruit Maté, Anderson said the company wanted to keep the caffeine content relatively low so that consumers can have multiple drinks in a night.
“All social drinks have caffeinated options — espresso martinis, Red Bull vodkas, and I mean, Four Loko obviously,” Anderson said. “But by putting caffeine and alcohol together it can create a whole wave of issues. But we’re going ahead and making the statement that mixing THC with caffeine is not actually dangerous, and it can enhance the experience and make it more social than if it were just THC on its own.”
Lo will also play a significant role in marketing the new product both as a social media ambassador and as the face of the product on in-store displays, which through the Sweet Flower and Airfield Supply Co. partnerships will mark a major step up in in-store marketing efforts for Cann. Anderson said Lo will be featured in cardboard cutouts, as well as stickers and on shipping boxes, which will receive prominent displays in retail. The dispensary channel has long posed logistical challenges for beverage brands’ ability to merchandise — with no-to-limited cooler space among the biggest hurdles — but this rollout will look much more like a traditional CPG launch.
Anderson highlighted Canadian dispensary LCBO, which recently revised its beverage strategy by putting beverages into a “star” position via prominent merchandising and saw sales skyrocket. For Cann, the experiment has already been successful, with soft launch sales from the past week resulting in “hundreds of units” being sold.
“It’s a huge change,” Anderson said. “About 90% of the dispensaries in California don’t even have refrigeration that is visible to the consumer, and that is just not how we buy drinks…. So I think it’s not a demand failure, it’s a retail readiness failure. But if we can put good creative behind things we get prioritized, so this is how we’re trying to prove that it can work on a micro level.”
As the cannabis beverage space fights to gain traction in the U.S. (drinks are still just 1% of the legal marijuana market), activity in the category is picking up. Earlier this year, Keef Brands announced expansion into several new states and debuted new beverages infused with less well-known cannabinoids such as CBG and THCv. Also this month, Ayr Wellness entered a binding agreement to acquire Massachusetts-based infused seltzer maker Levia, with $20 million paid in upfront consideration and up to $40 million more to be paid on earn-out.
However, even as Cann faces more competition, Anderson said the company aims to stay ahead by continuing to target young, socially active consumers. The company recently launched a keto-friendly Lite version of its products, made without agave syrup, which he noted has had a strong repeat purchase rate.
Last year, Cann took in about $3 million in revenue, Anderson said, with projections on track to triple sales this year. The products are now available in five states, including California, Nevada, Illinois, Massachusetts and Rhode Island, with Canada, the Pacific Northwest, Arizona and the Tri-State area expected to come online in the next 12 months. Other product launches, such as the on-the-go squeeze pack Roadies line, have performed well, Anderson added. Roadies, in particular, could grow to make up about 15% of total sales, he said, while the Hi Boy line has seen strong sales in California.
Next, Cann is preparing to launch a premium “Cann Reserve” line, made with high-end ingredients and flavors to provide consumers with a more upscale experience.
“When we think about some of our most exciting things in the cooker, we haven’t been able to greenlight them only because it’s too expensive,” he said. “Now we have enough brand equity that people who are really, really interested in Cann might be okay paying 20% more for something that has a really editorial flavor profile and ingredients with really good stories.”
Though federal legalization continues to be the biggest hurdle between cannabis-infused beverage brands and mainstream breakout success, Anderson said Cann is not actively involved in any lobbying or regulatory efforts, citing high financial costs that would be better invested into growing the company. However, Cann remains an active voice for legalization and has in particular called for equitable regulations that benefit BIPOC entrepreneurs whose communities have been more heavily harmed by prohibition and the War on Drugs.
“We believe that microdose THC products should be available in grocery stores,” he said. “It will probably take us a decade to get there, but there’s really no reason they shouldn’t be given how much less dangerous they are than alcoholic beverages or over-the-counter drugs. There’s no reason for them not to be at Whole Foods. So one day, when we have the right people at the table and the access to capital, we will make a push for it. But for now, we’re just gonna keep making good tasting drinks and put ‘em places.”