Forget the many buzz-inducing gummy candies and chocolate bars. More and more cannabis consumers are opting to drink their drug of choice. The cannabis beverage market, worth $901.8 million in 2018, has grown 45 percent annually in the past two years and is expected to reach $5.8 billion by 2025. One of the category’s breakout hits is the Venice-based Cann. Launched in June 2019, Cann has quickly risen to the top of the category, thanks to its stylish packaging, subtle flavors, celebrity fans, and the business-school acumen of its founders.
“Cann is one of the brands that has really led the charge in making these beverages mainstream,” says Kiana Anvaripour, the CMO of Sweet Flower, an L.A.-based dispensary with locations in Studio City, downtown, the Fairfax district, and Westwood. Cann is Sweet Flower’s top-selling cannabis beverage by volume, accounting for 50 percent of total sales in the beverage category. Sweet Flower’s Cann sales have doubled since March, which Anvaripour attributes to “‘canna-curious’ consumers seeking healthier alternatives to help them manage the day-to-day.”
Cann’s founders initially cooked up the product as an alcohol alternative. “Our twenties were very, very heavy-drinking years. And now that we’re in our thirties, a hangover is debilitating,” says cofounder Jake Bullock, 32, a Stanford business school grad who met his business partner, Luke Anderson, also 32, an alum of Harvard Business School, while they were working at Bain & Company consulting firm. The two thought of Cann as a way, Bullock says, “not to replace alcohol, but to drink 20 to 40 percent less than we did before.”
It’s a philosophy in line with the way many are looking to live now. Half of U.S. adults say they’re trying to drink less alcohol, according to 2019 data from market research firm Nielsen. Investors have taken notice. In January, Cann raised $5 million in a funding round led by Imaginary, a retail-and-tech venture capital firm cofounded by Natalie Massanet, the creator of Net-a-Porter, and cannabis VC firm JM10. Imaginary wasn’t expressly vying for a cannabis brand to back, but the idea of a chic alcohol substitute was appealing, as was the fact that Cann is relatively low dose: each beverage has just 2 milligrams of THC, compared to the usual 5 or 10 milligrams.
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Known for solutions that yield results, Seth Yakatan has completed or advised on acquisitions and corporate finance transactions totaling over $3 billion. He is CEO of Katan Associates International—a financial strategy and merchant banking firm specializing in commercialization and asset monetization—especially those within life-science and e-commerce sectors.