- Cann is a low-dose cannabis-infused beverage startup, founded by two Ivy League MBAs.
- The startup recently closed a $1.5 million seed round, led by cannabis-focused hedge fund Navy Capital, and included prominent angel investors from established VC funds.
- The startup took a novel approach in developing their beverage flavors, by mining through search data from Pinterest and Google Trends.
- Check out Cann’s pitch deck below, exclusive to Business Insider.
- See here for more pitch decks from hot startups.
As one of the fastest-growing product categories in the cannabis world, cannabis-infused beverages have elicited lots of investor attention in recent months.
Cann, founded by Ivy League MBAs Jake Bullock and Luke Anderson, has taken a novel approach in developing its CBD and THC-infused drinks.
After graduating business school — Stanford and Harvard respectively — the pair, who first met as associates in Bain’s San Francisco office, “sped-dated” each other, Anderson said in a recent interview at Business Insider’s Manhattan headquarters.
In order to develop the flavors for their beverages, Bullock and Anderson mined search data on Google Trends and Pinterest, honing in on what they say is “pent up demand” for flavors like lemon lavender, grapefruit rosemary, and blood orange cardamom.
Read more: We got an exclusive look at the pitch deck that cannabis education platform Green Flower Media used to raise $20 million from top investors
“We found that people really wanted savory and herbal flavors,” Bullock said. Coupled with organic ingredients and millennial-friendly branding (as evidenced by Cann’s Instagram page), they created a beverage that Anderson said could “sit on a shelf at Whole Foods, with or without the cannabis.”
Cannabis beverages, the thinking goes, give new consumers — who may be used to drinking alcohol socially — an easy entrance into the market. And they have fewer calories than alcoholic drinks, and come “without a hangover,” said Bullock.
Bullock and Anderson saw the most opportunity specifically in low-dose beverages, containing both THC and CBD, that are designed so that consumers without much experience can have a few beverages without feeling too high — just like you’d drink a few beers during a happy hour.
After creating the product, the next step for the founders was to raise capital. The pair got together to build a deck in New York City and started taking meetings with interested investors. While they landed meetings with a number of mainstream consumer VC funds, they found most weren’t yet ready to invest.
“We were spending lots of time educating VCs about the cannabis world,” Anderson said, though none of the funds could commit capital as THC is federally illegal in the US. They were told in those meetings to reach out to angel investors.
Read more: We got an exclusive look at the pitch deck buzzy marijuana tech startup Headset used to raise $12 million and ink deals with Nielsen and Deloitte
Some of those meetings did, however, lead to partners investing their own money outside of their funds, including Rob Stavis of Bessemer Capital, and partners at Soroban Capital Partners, The Capital Group, and Viking Global Investors.
They eventually closed on an oversubscribed $1.5 million seed round, led by Navy Capital, a New York City-based hedge fund that invests exclusively in the cannabis industry. Other investors in the round include Brian Spaly, a co-founder of the clothing brand Bonobos and founder of Trunk Club, as well as Elizabeth Spaulding, a partner at Bain and leader of the firm’s digital practice.
Sean Stiefel, Navy Capital’s CEO, told Business Insider that Cann is “the most exciting low-dose beverage concept we’ve seen.”
As of June, Cann’s drinks are available in MedMen stores in L.A. and San Diego. They’re also “actively monitoring” East Coast states like New York though they have no direct plans to enter the market yet.
See below for an exclusive look at the pitch deck that helped Cann raise $1.5 million:
SEE ALSO: Top investors say these 11 buzzy, under-the-radar consumer cannabis startups are set to raise fresh rounds and blow up this year