Gwyneth Paltrow, Casey Neistat and Other Celebs Invest in Cannabis Drinks Company Cann
Los Angeles-based cannabis drinks company Cann today revealed that it has the backing of numerous well-known celebrities, including actress Gwyneth Paltrow and former NBA star Baron Davis, among many others.
Rebel Wilson, Ruby Rose, Darren Criss, Tove Lo, Casey Neistat and Bre-Z also invested in the company.
Their investments were part of a $5 million seed round that closed earlier this year, Cann co-founder Luke Anderson confirmed to THCnet.
Anderson would not disclose the size of each investment but did note that Paltrow contributed the most of any celebrity and obtained as much as 1% of Cann in the process.
“These are personal checks,” he said. “They are not massive million-dollar investments, but they are sizable enough for these investors to feel like they are a part of the growth.”
The entire round was co-led by Imaginary, a New York-based venture capital firm, and JM10 Partners, a Boston-based fund that invests in emerging cannabis companies. Navy Capital, Global Founders Capital, Entourage Effect Capital (formerly Cresco Capital) also participated, along with the celebrity backers.
Since launching in June of last year, Cann has sold over 2 million units. The majority of those packages were distributed through the dispensary channel, but Anderson said part of the company’s strategy has been to get product in the hands of influencers in order to “amplify” the brand.
So for the better part of the last year, Anderson spent his nights driving around Los Angeles, responding to messages from verified Instagram users, and delivering samples.
“Our sales were pretty low early on in the year, but these conversations we were having were amazing,” he said. “And with enough late-night drives in my beat-up Volkswagen Golf, and enough conversations, it just began to organically spread.”
Anderson estimates that Cann will move more than 3.5 million units in 2020, approximately 2 million of which will be distributed in the fourth quarter alone.
“A lot of those are promotional units, which help us gain traction in the market,” he conceded, noting that about 75% of all Cann packages are sold through dispensaries located in California, Nevada and Rhode Island.
Expanded distribution to Colorado, the Pacific Northwest and the Tri-state area is also in the works, Anderson said.
Most of Cann’s “social tonics” contain roughly 30 calories and are “microdosed” with 2 milligrams of THC and 4 milligrams of CBD. A recently introduced Pineapple Jalapeño flavor contains 50 calories and 5 milligrams of THC.
At the moment, the company is continuing to build its presence in California, where Kiva Sales & Service — the distribution arm of popular edibles company Kiva Confections — distributes the brand statewide.
In an effort to grow its own sales and build the overall cannabis drinks segment, Anderson said he will often provide free refrigeration units to dispensaries that might be hesitant about giving up valuable real estate to a less profitable item.
“So few dispensaries are set up to support beverage, because it is only 1% of the market and it is the least interesting category to consumers who are walking into stores today,” he said, noting that a case of his cannabis drinks can take up as much physical space as more compact and more profitable products like vape cartridges.
“It’s mind-boggling how much work we have to do to get an account comfortable taking a bet on the dream,” he added.
However, when a dispensary operator allows Cann to perform product sampling or run promotions to get consumers in the door, sales skyrocket.
According to Anderson, the company’s largest chain dispensary accounts — MedMen, Sweet Flower and Urbn Leaf — are now ordering 25,000 to 50,000 cans a month. Meanwhile, cannabis delivery service Eaze is on pace to sell one million units of Cann in 2020.
“As the industry evolves, and as retail partners and distributors continue to make things happen, it should get easier over time,” he said, adding that broader mainstream retail distribution is the eventual goal.
That's a bet Cann’s celebrity backers are making as well.
In an interview with THCnet, Neistat, a popular YouTuber with more than 12 million subscribers, said he views THC-infused beverages as a substitute for alcohol that could one day be sold at grocery and convenience stores.
“Politically, the idea that alcohol is something that’s been accepted into the mainstream for 90 years now and marijuana is something that is still a Schedule I drug is kind of absurd,” he said. “I come from a perspective that the wall is going to come down sooner or later. Marijuana is something I believe should be regulated and treated similarly to alcohol.”
For her part, Paltrow believes that Cann “sits at the intersection” of the canna-curious and sober-curious trends.
"There's no reason why alcohol should be so much easier to purchase than Cann, and I'm confident the founders will lead the charge in finding ways to integrate it into the same purchasing channels and drinking environments,” she said via a news release.
Anderson said he believes low-dose cannabis drinks will find their way onto mainstream retail store shelves within the next five years. When that happens, he anticipates that alcohol companies will come knocking.
“They stand to gain a lot from thinking about the next wave of social beverages,” he said. “They are already interested in low ABV and no ABV. They are already invested in cannabis but have placed it in Canada or CBD in the U.S., and heavy drinks are something they are better positioned to move.”
Indeed, it is believed that beer distributors will eventually be the ones to bring cannabis-infused drinks to market. They have robust logistics operations that have been designed around delivering hundreds of brands to thousands of retailers. They also have sprawling warehouses, refrigerated trucks, and experienced workforces at the ready.
In the meantime, Cann is hoping its star-studded investor roster will bring broader awareness to the brand and the category as a whole.
Neistat, a long-distance runner and former triathlete, said he’s “not really a big weed guy” and almost never drinks alcohol. Nevertheless, he has previously mentioned Cann in social media posts and featured the product in some of his YouTube videos, which illustrates the opportunity that Cann and other THC-infused beverage makers have in front of them.
"Based on the assumption that cannabis will be legal nationwide at some point in time, I think the biggest market is actually going to be in the space that is not appealing to people who already consume marijuana," Neistat said, referring to those who prefer inhalable products.
However, don't expect Neistat to suddenly start pumping out YouTube videos about Cann.
“I’m always very delicate in what I present to my audience,” he said. “If there is an appropriate way of talking about it organically, like I have in the past with my content, I will do that. But I don’t know that I would do much more.”
Additional information about Cann is included in the announcement below.
Cann, the first Cannabis-infused Social Tonic, Announces Investment Led by Celebrity Power Players, Including Gwyneth Paltrow, Rebel Wilson, Ruby Rose, Darren Criss, Baron Davis and More
New Investments Showcase The Wide Appeal of Cannabis As An Alcohol Alternative
LOS ANGELES, Oct. 29, 2020 /PRNewswire/ -- Cann, a Los Angeles-based purveyor of cannabis-infused social tonics, announced today an investment from a star-studded group of actors, musicians, athletes and creators, including Gwyneth Paltrow, Rebel Wilson, Ruby Rose, Darren Criss, Baron Davis, Tove Lo, Casey Neistat, and Bre-Z. Since the brand's inception in 2019, Cann has become the fastest growing THC beverage to date with over 2 million cans sold, and quarter over quarter sales growth for 2020 continuously doubling in numbers. Cann is also the #1 selling thc-infused beverage in California according to BDS Analytics.
Cann's latest investors join the brand on a collective mission to revolutionize the way consumers socialize by offering better-for-you alternatives to alcohol and other vice products. For each of Cann's latest celebrity partners, this investment marks their first major venture into the cannabis space — marking a monumental step for the brand in achieving its overall goal of normalizing cannabis consumption and breaking down stigmas within the industry.
"Cann sits at the intersection of two powerful trends we've been monitoring at goop for some time: the 'sober curious' and 'cannabis curious' movements," shared Gwyneth Paltrow, Academy Award-winning actress and founder & CEO of wellness and lifestyle brand, goop. "There's no reason why alcohol should be so much easier to purchase than Cann, and I'm confident the founders will lead the charge in finding ways to integrate it into the same purchasing channels and drinking environments."
Comedian and actress Rebel Wilson shared, "Cann is perfect when you're having a dinner party or a few friends over and you want to serve an adult drink that is also healthy and has natural ingredients."
As the industry leader in a growing market for non-alcoholic beverages that use cannabis as a functional ingredient, Cann's high-quality formulation is designed to deliver a similar buzz to a glass of wine or beer, minus the calories or unwelcomed hangover. Each Cann is thoughtfully formulated with 2 milligrams of THC plus 4 milligrams of CBD, providing a microdose of cannabis for approachable, controllable consumption.
"When making an investment decision, you have to invest in two things - the product and the people. The Cann product is excellent - it's delicious with all natural ingredients, its beautiful branding and packaging, and its uniqueness as a micro-dose beverage make it a winner," said actress and model Ruby Rose. "The team behind it is smart and have grown the brand quickly without compromising value or bending to what the traditional cannabis market is ready for right now. Added to that is the fact that this company is queer-founded and diverse. They are building a team currently made up of 50%+ women and 33%+ people of color. So for me, it was an easy decision to invest."
Closing on a five million dollar seed funding round co-led by Imaginary, whose credentials include Skims, Everlane and Daily Harvest, and JM10 Partners in January 2020, Cann has continued to see growth at an unprecedented rate — and in an unprecedented time. The brand has recently expanded into Nevada, with four additional state markets to follow in the next six months.
"We couldn't be more excited to welcome this group into our Cann family and have them share in our mission with us," said Luke Anderson, Cann Co-Founder. "We created this product for consumers that are new to the cannabis industry and looking to moderate or reduce their alcohol consumption. To have taste-making celebrities who don't have a 'stoner' identity attached to their personal brands wanting to help us spread this message to a mass consumer base is a game-changer for Cann, and a sign for how this industry will evolve in the coming years."
"With our range of products, we strive to change the way people socialize by giving them social beverage options that are better for them, mentally and physically," remarked Jake Bullock, Cann Co-Founder. "To have such a culturally-relevant group of celebrity investors behind us that believe in this product and that mission, together, we'll introduce a new wave of consumers to an alcohol alternative that delivers an uplifted, social feeling but with none of the harmful effects and actually tastes delicious. Welcome to the Cann family!"
Cann is currently available at dispensaries throughout California, Nevada, and Rhode Island including MedMen, Sweet Flower, and Urbn Leaf. For home delivery, visit shop.drinkcann.com and a number of partners including Eaze.com. For additional information and locations visit drinkcann.com.
Cann is the #1 selling THC-infused beverage in California according to BDS Analytics. Founded by Stanford and Harvard graduates, Cann is reshaping social drinking with their microdosed, non-alcoholic beverages that deliver a perfect, uplifting feeling every time. Vegan, gluten-free, and with only 35 calories, each Cann has five all-natural ingredients with a strength that is similar to a beer or glass of wine. There are no artificial sweeteners or flavors, sugar substitutes, or cannabis taste.