How Cann Took The Cannabis Industry By Storm
"21 out of 25 people who consume alcohol are interested in reducing their consumption of alcohol, however, it’s very difficult to do so."
A product category that I’m very bullish on is cannabis beverages.
Within this category, there are a number of companies who have caught my attention and continue to go from success to success as the demand for cannabis beverages continues to increase as a new category of consumers who are seeking the effects of cannabis, without having to smoke cannabis come online.
In Canada Truss beverages has presented itself as the market leader, however, in California — the largest cannabis market in the world there is one company that has taken the market by storm in recent times; that company is Cann.
Although Cann was only founded in 2019, they have already become the top-selling cannabis beverage in California and are currently in the process of expanding into new states via their partnership with one of the leading multi-state operators Green Thumb industries.
For today’s edition of Four PM, I had the opportunity to sit down with Luke who is the Co-founder and CEO of Cann to learn about the insight that led him to build Cann, the challenges he faces in scaling Cann, and much more.
Luke Anderson is a former consultant for Bain, and is currently the Co-founder of Cann — the #1 cannabis beverage brand in California.
What was the insight that led you to start Cann?
My co-founder Jake actually came up with the idea originally many years before we started the company.
After having drank too much alcohol more than once, he would argue that cannabis was the future and my point of view at the time was that if you were already having problems with one drug then why would you go ahead and introduce another?
He very intelligently communicated the very long history whereby we have been consuming mildly intoxicating beverages — both cannabis and alcohol-based.
When I turned 30 I had my first two-day hangover which really affected my performance at work on Monday, and I became much more open-minded to the idea of a cannabis beverage if I wouldn’t have to experience hangovers.
The final insight for me was that cannabis beverages could be integrated into the same social experiences I was used to, as opposed to taking a microdose of a cannabis edible before heading to the bar.
Cann has very quickly become a category-defining product, as you look towards the future what do you see as the future for Cann?
2-5mg of THC / CBD ready to consume cannabis beverages is really how we differentiate ourselves and this approach provides new consumers with a very easy entry point into cannabis.
We want to become the brand that’s synonymous with this specific category — even if it’s not a Cann branded product people will still call microdose cannabis beverages “a Cann” such as they do with a product like Kleenex.
I don’t see us going into edibles, and although we might license our flavors to a different company I don’t see us going into this category. In addition, I don't ever see us going into higher potency beverages such that Cann continues to become synonymous with this specific product category.
What are some challenges you face in scaling Cann?
Manufacturing partners are very hard to find.
It’s very difficult to convince people to dedicate 2,00 Square foot of space and a million-dollar equipment install which would result in $1,000,000 in revenue in the first year when they can simply take that same space and use it as a flower canopy.
This short-term mindset of how we service the customers of today who are very focused on each MG of THC per dollar in products and the required storage space makes it difficult for Cann to expand.
In distribution, you can either stock a truck full of flower, vapes, and beverages which are very easily transported, or you can load it up with Cann’s which typically take up more space.
Finally, in retail stores these spaces aren’t designed like grocery stores such that they don't have the necessary space to store these products so overall there’s a lot of headwinds we face in getting this category off the ground in the near term.
Eventually, we foresee the industry waking up that they need to prioritize this type of product in order to bring new consumers into their stores, and we are already seeing this happen today.
What’s been the highlight in building Cann so far?
Without a doubt, it's the team we have at Cann.
Cann has an amazing diversity of cannabis consumers on our team with some team members preferring 500mg edibles, and others being completely sober, yet they all believe that we are solving an alcohol substitution problem.
Despite the fact that many people in the industry generally want Cann to fail as a result of not having higher amounts of THC in our products and that our products “don't get you high” our team shows up every day.
As great as all the celebrity partnerships have been, and the fun we get to have on the creative branding side there’s something really exciting about that relentless belief and this energy that each person brings to the table each day, and it makes building Cann so worthwhile.
What has you most excited about the future of the cannabis industry?
Cann is a queer founded brand, and the idea of coming out of the closest is very salient to the cannabis community and this idea of coming out of the cannabis closet is something which we are really starting to see as you look at the growing list of celebrities who are now consuming Cann.
The social change is something I can see being very similar to gay marriage whereby people at first didn’t understand it so they stayed away from it and then overnight this narrative changed and people became much more accepting.
More people are now in favor of cannabis legalization than ever before, however, consumers are still for the most part still afraid to talk about consuming cannabis due to the stigmas that exist, and what I’m most excited about is cannabis becoming so normal that you wouldn't think about anyone differently for consuming cannabis.
With this, I also can see some really interesting changes from a regulation standpoint where we could see microdose cannabis beverages like Cann being sold in grocery stores, and in liquor stores which is something I think big alcohol and big CPG companies should be paying very close attention to.
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