Reimagining How We Drink
Can Cann reshape social drinking and cannabis consumption all at once?
It’s 11 am on a Saturday in Bernal Heights in San Francisco. I’m on a party bus that’s celebrating a friend-of-a-friend’s birthday. It’s a wild time, with music blaring, people dancing, and alcohol flowing as we shuttle relentlessly around the city to different stops at Twin Peaks, Ocean Beach, Sausalito, and the Mission.
I’m also five days into Dry January, an annual tradition post-holidays reset based on abstaining from alcohol. The raucous party atmosphere, in years past, could typically devolve into an exhausting experience, as the gap between most attendees’ intoxication and sobriety widened.
The 2020 edition, however, goes a little differently. In lieu of alcohol, I’m trying Cann, a low dose THC tonic that’s aiming to upend both the norms of cannabis consumption and how we drink in social settings. My fellow partygoers are a little confused by the concept (“Does it… taste like weed?”) and I’m not sure what to expect.
Three hours later, I’m lightly buzzed and still enjoying the (definitely far more buzzed) bus companions. Better yet — by the evening, I’m fully sober, blasting a few emails out, while other attendees are passed out or hurtling towards a hangover. In contrast to other cannabis beverages that didn’t deliver tastewise or are dosed to tranquilize an elephant, Cann was enjoyable to drink, kept me socially lubricated, and had none of alcohol’s downsides.
It was an impressive first experience. And, unbeknownst to me, it was entirely by meticulous, hard-fought design.
Jake Bullock and Luke Anderson’s paths to beverage industry disruption couldn’t have been more different. While they both shared experiences in management consulting, having met in 2012 working at Bain & Company, their perspectives on the nascent cannabis industry were wildly divergent.
Having grown up in Colorado, Jake was front row for the evolution of the cannabis industry. He immediately recognized dosage as a huge pain point for many consumers, where products designed for heavy pros inhibited many people’s ability to access cannabis even conceptually. He became fixated on the importance of social usage — and the role that beverages might play.
Luke, in many ways, was one of these consumers “locked out” of the industry. Alcohol was a familiar and widely accepted social intoxicant — why bother trying to put weed in a beverage? While Jake was proclaiming the gospel of canna-beverages on every weekend trip, Luke was a firm devil’s advocate, questioning why and how alcohol alternatives might take off.
But Luke couldn’t shake Jake’s concept.
An increasing emphasis on healthy living and wellness, alongside the escalating national acceptance of cannabis, were trends he knew intimately. His work at Bain focused on helping large consumer packaged goods companies behave like startups to move nimbly within market trends and launch new products.
Jake had dove fully into the cannabis industry, interning at trendy vape startup besito. Meanwhile, the tech around cannabis beverages was improving, with new emulsions allowing for improved onset time and taste. Jake’s MBA at Stanford had been a great testing ground to incubate a new type of cannabis beverage.
When Luke approached Jake about joining in the idea, the timing was ideal. Unbeknownst to them, their backgrounds and strengths were equally compatible.
“Our guiding light was creating something that would be successful in premium retail. Would this interest the shopper who couldn’t tell THC from CBD?”
Cann’s development was a product of tremendous iteration and research, drawing from each founders’ strengths. The duo wanted to build a product with low dosage (ultimately just 2.5 mg per can), but that couldn’t be the only draw. The goal was a beverage that would not just appeal to a cannabis consumer, but could stand on its own.
The team, with Luke spearheading, was “maniacal” about the formulation, seeking true white space across flavors, ingredients, and calories, within the functional beverage market. Deep dives into Google Trends data, crawling DIY cocktails on Pinterest, consulting with food scientists — the hunt for approachable fruit and niche savory flavors spanned eight months.
“When a Whole Foods category buyer is asking for the virgin product, you know you’re onto something.”
Cann’s eventual flavors (grapefruit rosemary, blood orange cardamom, lemon lavender) combined the familiar with new twists. Equally important, each beverage was flavored with agave nectar, keeping the calorie impact low (only 30) without the potential flavor quality tradeoffs of sugar substitutes.
Branding was an equally in-depth process. Like the formulation, the founders knew Cann would need to stand out, rather than look like 1995 gas station inventory. Jake was dogged in leading the development, cycling through seven designers and countless ideas. As the design finally coalesced, DTC branding powerhouse RED ANTLER even helped with final tweaks.
The branding work, like the product development, paid off. The intense thought manifested in multi-layered details, like wisps of smoke rising off of grapefruit and staircases climbing… higher, and helped impress early potential customers. But impressing investors would be a more challenging task.
Jake and Luke had flown around the world for months in early 2019, globetrotting across continents to sell investors on their pre-seed round. They’d met with nearly 100 groups, thrilled to finally fund and launch the Cann concept.
But investors were… less enthused. A few rejected the fundamental concept, believing consumers would never pay for a microdose product. Others critiqued the founders’ percieved lacked of experience building brands.
For many, the timing was off. Consumer product investors feared Cann was too late, as large players like Canopy Growth shared plans to enter beverages. Cannabis industry specialists saw an inverse problem, believing beverages’ true potential to be years away.
And then there was CBD. Investors were fascinated by the rising CBD mania sweeping the nation, and pushed the duo to consider a pivot for their launch. Tempting as it might have been to try to leverage the CBD hype, both founders agreed it wasn’t their vision.
“Everyone kept pushing us to launch with CBD. It was really hard to not just take the money and go for the land grab. But we knew that wouldn’t get us out of bed every day.”
Thankfully, some investors eventually agreed. Navy Capital, a cannabis hedge fund, agreed to lead Cann’s $1.5 million pre-seed round. The concept was complete, the funding was (as they say) secured — it was time to scale the business.
The early compatibility between Jake and Luke’s continued to benefit Cann as they’ve grown.
Jake holds the CEO position, while Luke technically holds no formal title. The seemingly atypical arrangement has allowed the two to cycle to match their skills with the most critical tasks at hand.
In the early innings, Jake handled manufacturing, while Luke tackled on sales and marketing. More recently, Jake focused on all things related to their end consumer, while Luke keyed in on their customers (like distributors and dispensaries).
“It’s about adaptability. We’re constantly evaluating priorities and organizing our team to put each person where they’re best suited.”
It’s been a exciting eight months since launch. Cann has sold over 150,000 cans through 75 dispensaries across California, and its team now includes 11 full-time employees. Equally important, investors have warmed since their first fundraising grind, allowing for a recent $5 million seed round led by Imaginary and JM10.
The fresh capital won’t go to waste. The company has aggressive growth plans, innovating across product, pricing, and geographies. They’ve recently launched Cann Lite, a new eight calorie, no added sugar variant of the popular Grapefruit Rosemary flavor, as well as trialling new size formats. Meanwhile, manufacturing experience is allowing the company to drop prices to just $4 per Cann, a cost more competitive to craft beer. Perhaps most exciting for fans in other states, a partnership with Ascend Wellness will enable Cann to reach new geographies this year.
“The dream is federally legal cannabis, and the hope is that regulators wise up that microdoses of THC are safer than alcohol. ”
Even with exciting intiatives in motion, the founders can still dream big. Cann’s vision is one where a micro-dose THC drink can sit on tap next to your favorite craft beer — and it’s recognized as a safer alternative.
It’s a bold idea, one that entails an somewhat unconventional wish from a startup. Luke tells me as we’re finishing our conversation that he’s hoping for more competitors. “I know it sounds crazy, but if a bunch of fridges are filled with sessionable THC beverages, it builds understanding, raises interest, and helps legitimize the category.”
I can’t help but agree. After my party bus experiment, I’m onboard with the dreams of a microdose beverage future, and excited to try new brands.
In the meantime, however, I’m definitely going to have more than few Canns.
Interested in canna-beverages? Check out previous stories on why canna-beverages could change the game, what it takes to create a great CBD beverage, why low dose matters so much, and how Oh Hi! is combining beer expertise in building a THC seltzer brand.
At Cannablurbs, we’re excited to share the varied perspectives of different leaders across the industry through profiles, interviews, and Guest Articles. If you’re active in cannabis and think you have an interesting viewpoint to share, shoot us an email to talk about collaborating.
