When Jake Bullock and Luke Anderson worked together as consultants at Bain & Co. in 2014, they argued over cannabis. While neither had been big pot smokers, they saw the obvious potential in the industry, particularly as legalization expanded across America. But Bullock, who grew up in Colorado, where medical marijuana has been legal since 2000, was pushing a new category beyond flower and edibles. He told Anderson that one day, small-dose cannabis beverages would take a share of beer, wine and spirit sales.
“I was a skeptic—and a big alcohol drinker who thought alcohol was doing the job just fine,” says Anderson. “But then I turned 30 and had my first two-day hangover.”
In the spring of 2018, Bullock was mixing “social tonics” in his garage in Palo Alto while attending Stanford for his MBA. Bullock’s “beverage lab” was a janky operation of a blender, a couple of kegs and an amateur canning process with a forced carbonation method. “I made a bunch of flavors and sent six-packs to classmates with a questionnaire,” he recalls. By fall of 2018, Bullock and Anderson teamed up and had raised $1.5 million in seed funding and launched Cann, as their product is cleverly named.
The duo was first attracted to drinks because they think it’s the delivery system that is the most social and mainstream. Drinks are also faster-acting than edibles, typically around 15 minutes. But they decided to go low-dose—a 12 oz. Cann contains just 2 mg of THC, the psychoactive compound in cannabis—because they realized other mainstream adult beverages, like beer or hard seltzer, are packaged that way.
“How is this industry going to grow up?” Bullock, who is now 33, remembers asking. “Our training from Bain told us to look at analogues: caffeine and alcohol are mild intoxicants when we drink them at a low dose, which is why we can have four cups of coffee, or a couple of beers in an evening. That concept wasn’t in the cannabis industry. Bringing the dosing down makes a lot of sense for a social product. You can consume many of them, it’s incremental, you can share.
“By bringing the dosing down,” he continues, “you get a euphoric, much more controllable, uplifting experience. You can’t have a bad experience with a Cann. You’d have to open all six and chug them.”
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.