Hemp-based beverage brand Flyers Cocktail Co. announced this week that it closed a Series Seed funding round led by cannabis-focused investment firm Delta Emerald Ventures. Now the brand’s co-founder and CEO Craig “Lewie” Lewis says the company is off the ground and cruising.
Flyers launched in 2022 with a line of CBD-infused, non-alcoholic RTD cocktails packaged in 8 oz. cans and offering unique riffs on classic bar concoctions like the Old Fashioned. But it’s been the brand’s extension into Delta-9 hemp-derived THC drinks last spring that has driven a revenue spike of more than 280% over the past year.
According to a pitch deck shared with BevNET by the brand, direct-to-consumer sales of Flyers were up 32% over the last 12 months (as of March 2024) and 136% for the past three months. On average, Flyers says it is now seeing 21.71% revenue growth month over month.
Flyers’ THC line now makes up around 80%-90% of the business, Lewie said. Its 12 oz. drinks feature three non-alc cocktails made with 5 mg of Delta-9 THC, with Sparkling Ol’ Fashioned, Sparkling Margarita and Sparkling Spritz varieties. The drinks retail for $18-$23 per 4-pack, depending on the retailer, and are also sold in limited bar and restaurant accounts for $11-$14 per can.
In addition to Delta Emerald, the seed round also included participation from another cannabis-focused firm, Mindset Capital.
“Hemp THC beverages satisfy a growing need among today’s consumers, who are increasingly seeking an alternative to alcohol. This represents a pivotal moment for cannabis, and especially cannabis beverages, to gain significant market share,” said Delta Emerald founder and chief investment officer Ian Dominguez in a press release. “Flyers Cocktail Co. stands out with its distinctive product portfolio and an exceptional team that integrates technology and data into all aspects of operations, from sales and marketing to production decisions.”
Though dollar sales data was not available, those gains come as Flyers grows its distribution presence to around 600 stores nationwide – including Total Wine & More locations in Connecticut and Tennessee with endcap displays – and Lewie said the brand is on track to reach an estimated 2,000 doors by the end of the year, bolstered by recent distributor partnerships in Illinois, Kansas and Missouri.
Lewie said the goal for the seed funding is to now expand the company’s sales team, with a focus on recruiting experienced alcohol reps who can more easily navigate the liquor channel and beer distribution network. Its current team consists of five full time and four part time employees.
“Overall alcohol sales [have been] declining over the last couple of years in general, and so with alcohol brands and distributors there’s high performing sales team members that are kind of looking for what the next big categories are,” he said. “We’re really excited to be able to have conversations with really high performance [reps] for these roles and bring in some strong backgrounds and relationships into the sales team.”
Flyers is currently sold in retail in 10 states, including Massachusetts (where it is a top five hemp THC brand in retail), Connecticut, New Jersey, Minnesota, Florida, Ohio and Tennessee, with Florida and California scheduled to roll out “imminently.”
However, due to regulatory challenges, Lewie said Pennsylvania and its home state New York – where THC content is limited to 1 mg per can – are “on hold” until there is a clearer legal climate. Online, Lewie said the brand can ship to around 40 states.
In addition to hiring, Lewie said the seed funding will also be put towards inventory growth and manufacturing, in order to support the expansion initiative. Flyers has doubled its production runs, he said, producing over 400,000 cans this month ahead of the summer selling season.
The brand is also reporting double-digit retention rates. The pitch deck states that the average customer blended reorder rate is at 36% and a website conversion rate of 7%. DTC reorder rates are around 20% with average reorder basket size of $99. A subscription model is planned to launch next quarter.
Looking ahead, Lewie said Flyers is now looking to raise a Series A round to sustain growth. As well, the brand is developing new product launches for the near future.
“We’re making sure as a business that we’re [meeting] the key performance indicators that we’re driving towards, so that when it comes time to raise the Series A, hopefully, it’ll be a little bit more of a faster process.”