Cannabis-infused beverages make for 'a real category expander': Cann co-founder

Cann Co-Founder Luke Anderson sits down with Yahoo Finance Live to explain the rising trend of cannabis-infused drinks, differences between alcoholic beverages, state-by-state availability, and celebrity endorsements.

影片文字轉錄稿

DAVE BRIGGS: Circle K just the latest expansion of the cannabis industry. You can get it in all types of forms. And you can get it in 19 states recreationally. One of the forms that is the hottest seller in this country includes beverages, currently the fastest growing segment there. Luke Anderson is the co-founder of the Cann social tonic that is the best-selling THC beverage in the country, surpassing 10 million cans sold. Luke, good to see you, man.

LUKE ANDERSON: Good to see you, too.

DAVE BRIGGS: Kind of felt mainstream when you hit "The New York Times" with an article all about cannabis drinks with the question, are they safe? So you answered that question. There's not a lot of knowledge. There's not a lot of research. Are they safe?

LUKE ANDERSON: I think the better question is, is alcohol safe? I think they point a finger at cannabis beverages as a buzzy alcohol substitute. But they're not really-- they're ignoring the bigger issue, which is drunk driving, domestic violence, the health and wellness issues of alcohol, which is just so apologized for and advertised so freely. I think that cannabis beverages are absolutely safer than alcohol.

DAVE BRIGGS: Interesting point. What do you want to educate people on them? First off, how do they react differently than alcohol?

LUKE ANDERSON: Well, the other thing that "The New York Times" piece missed is there are so many different types of cannabis beverages. Cann, which is the lowest dosage on the market, 2 milligrams of THC, it's a product you can drink, and it has a similar intensity of effect to light beer or a glass of wine. There are 100 milligram THC beverages that, for an uninitiated consumer, those are dangerous. But because the category is so new, they're all lumped together. And sometimes people even think CBD beverages, which don't have an intoxicating effect, are put in that same category.

DAVE BRIGGS: And you think CBD beverages are effective or placebo?

LUKE ANDERSON: I think they're about as effective as a spirulina smoothie. And I think that because it's a three-letter acronym, it's a cannabinoid, there was a lot of confusion. Consumers thought, when there were big CBD beverage marketing campaigns a couple of years ago, is this an alcohol substitute? But it does not get you a buzz because it does not have the THC.

DAVE BRIGGS: A study said that more than half of the cannabis beverages purchased in '21 were of the 100 milligram variety. Jones Soda just came out with one 100 milligrams yesterday. How do you feel about that segment?

LUKE ANDERSON: Per dollar sales, the 100 milligram beverages are absolutely where the market is today. But if you look at the units-- and you see these cans here, one unit is 6 cans. So if you look at a per unit of measure, low dose products are actually far outpacing because for every unit that people are buying, you're actually getting six drinks. And we think that that's going to continue to accelerate. The overall cannabis market's growing 30%. Beverages are growing 50%. We grew in that same time period last 12 months 150%.

DAVE BRIGGS: Why?

LUKE ANDERSON: I think it's because we're attacking the mainstream consumer. 80% of adults wants to drink less booze we are the only product on the market that's safe enough for someone who's trading alcohol with a cannabis beverage to consume without fear of being too intoxicated. So it's a real category expander.

The people who are buying Cann, sometimes it's their first ever cannabis purchase. Sometimes it's their first trip to a dispensary. And we think that's powerful. We think that the growth of the cannabis market relies on welcoming new consumers with something safe.

DAVE BRIGGS: You say you're going 150%, yet a patchwork of state laws must make it exponentially more difficult to operate.

LUKE ANDERSON: Absolutely. We have to build a manufacturing facility in every single state we're in. So expanding from California to Nevada to Arizona, we can't move product across state lines. And the packaging looks different because local regulations indicate that it has to. We're also available in Massachusetts and in Illinois with the THC product. But we do have an unspiked product, which is available nationwide. You can order it online, but no THC, no CBD. Just a good-tasting drink.

DAVE BRIGGS: How is that selling comparatively?

LUKE ANDERSON: It's 10% of our overall business. But we don't really market it. It's more for people who want to try Cann, at least the flavor, and they're not available in the state that they're in.

DAVE BRIGGS: You have some celebrity endorsers, Gwyneth Paltrow most notably. Who is your target audience?

LUKE ANDERSON: Our target audience is the healthy hedonist. And our celebrity endorsements-- and we have 35, so they span ages, genders, sexualities. There's no real demographic here that describes someone who wants to drink less booze and switch to cannabis. It's just a desire to be healthy, but you still want to have a little fun.

And so we've partnered with a bunch of athletes, actors, musicians, YouTube creators. And we use their celebrity to drive awareness of the brand. And it's an army of people who really just believe in it, and they invested with their own money. So it's not like we're paying them a ton of money to do a puff piece. It's just, they're part-owners of the business.

DAVE BRIGGS: Biggest news to come out of cannabis lately was President Biden with these pardons that some felt was largely symbolic because federally, not many were arrested on possession, but re-examining Schedule 1. How optimistic are you based on that and about federal legalization?

LUKE ANDERSON: I tell you what, it would be a very popular move to legalize. And I think Biden stands to gain a lot by accelerating the progress on rescheduling, descheduling, and eventually, decriminalization, expungement, full legalization. But it's a very complicated process. It'll probably take years. We're building this business as if it could be 2028. And so investors are betting on the dream and the long-term vision, not a short-term outcome.

DAVE BRIGGS: How far are we from drinking these in a restaurant or a bar?

LUKE ANDERSON: Great thing you asked. We actually can do it today in Minnesota. I don't know if you saw, but Minnesota accidentally legalized THC infused beverages under a certain threshold. So Cann is able to be sold in convenience stores just like Green Thumb and Circle K. Those would be adjacent partnerships. Cann in Minnesota, you can buy convenience stores, grocery, and on-premise consumption.

DAVE BRIGGS: Wow, fascinating. Luke Anderson, co-founder of Cann Social Tonic, good to see you, man. Thank you.

LUKE ANDERSON: You, too.