Editors’ Note: This is the transcript version of the podcast. Please note that due to time and audio constraints, transcription may not be perfect. We encourage you to listen to the podcast, embedded below if you need any clarification. We hope you enjoy!
Research continues to show alcohol is harmful. If only a substitute social tonic could provide that happy feeling without the hangovers.
This week on The Dime, we host Luke Anderson, Co-Founder at Cann, to discuss:
- Crossfading: Mixing of Alcohol & Cannabis.
- Why Altering Framework Unlocks Beverage Category
- Misconceptions on Beverage Market Size
About Cann:
Cann is a sessionable drink, meaning you can control and build your buzz because it’s microdosed with just the right amount of THC. With a typical onset of just 10-15 minutes, start with one and go from there. For those new(ish) to cannabis, we typically recommended 1-2 Canns.
About Luke Anderson:
Luke Anderson is the co-founder of Cann, the world’s first micro-dose THC beverage. With his colleague Jake Bullock, Anderson launched Cann in 2019, disrupting the industry with a sessionable cannabis-infused beverage line.
Guest Links:
- https://drinkcann.com/
- https://www.linkedin.com/company/drinkcann/
- https://twitter.com/drinkcann
#cannabis-infusedbeverage #cannabisindustry #drinkcann
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[00:00:00]Bryan Fields: What’s up guys? Welcome back to that episode of The Dime. I’m Brian Fields and with me as always, as Ke Finney this week, and we’ve got a very special guest, Luke Anderson, co-founder. Can Luke, thanks for taking the time. How you doing today?
[00:00:13]Luke Anderson: Thanks for having me. I mean, I would say I’m doing great, but it is a blood bath out here and so I am barely hanging on
[00:00:23]Bryan Fields: I
[00:00:23]Kellan Finney: love it. Ke. How are you doing? I’m doing well. Really excited to talk to Luke. Really excited to talk beverage. And really excited for West Coast, right. Little West Coast representation. How are you Brian? I’m doing
[00:00:35]Bryan Fields: really good. Obviously I’m a big fan of beverages. I’m a big fan of Cam, but I think Luke, before we get started, we gotta talk a little East coast, west coast.
[00:00:41] I may have some East Coast ties, but would you call yourself a east coast or a west
[00:00:44]Luke Anderson: coaster? I’m a Boston boy. Through and through. I spent 18 years of my life, just like in and around Boston and um, I went to college on the west. Probably done more of my professional career in [00:01:00] LA in San Francisco, but I think there’s something that I love about how mean everybody is to your face on the East Coast.
[00:01:07] And I, I miss that because on the West coast everyone’s really nice to your face, but a lot happens behind your back. And, um, nobody in Boston have time for that. Love it. I
[00:01:18]Bryan Fields: love it. So let the record say another east coaster and a big, a big one for the East coast, but the West coast eyes. For our listeners that are unfilling about you, can you give it a little background about
[00:01:26]Luke Anderson: yourself?
[00:01:28] Uh, yeah. I, um, I mean, I’m a guy who went to college for something and then switched to something else, and whether it was a math teacher or management consultant or, uh, business school student or uh, weed soda maker and salesperson, I, I’ve kind of. Been a career journeyman between industries with the common thread of I love building things and I love building things that I would buy with my hard-earned dollars and that I would drink.
[00:01:59][00:02:00] Um, I, I worked at Jamba Juice in college, so there’s a little bit of a beverage through line dating back to 2007. And, um, my, my dad has been in the restaurant industry and I consulted for a lot of f and b and CPG companies during my six year run at ba. . Uh, so there’s um, there’s sort of a convergence of career related factors that led me to be interested in joining my business partner, Jake, whose original idea can was, um, and then also a lot of cannabis naivete.
[00:02:33] I was not a cannabis user at all unless it was by accident. And, and that was like eating too much of a pop brownie or coughing too hard off of a bong rip. I didn’t know how to, to suck in. and, uh, needing to be escorted out of a party because I didn’t know how to be high and talk to people, uh, that, that led me to this, this sort of microdose, CHC beverage journey.
[00:02:57] Uh, the one other piece of the puzzle is I have [00:03:00] historically been a very problematic alcohol drinker. I, I think, You know, in my mid twenties, that was especially bad and I, I had my first two day long hangover when I was in my early thirties, and those of us who know what it’s like to party too hard on a Saturday night and then feel it still on Monday morning, know that unless you’re really coasting.
[00:03:21] it can be really damaging to productivity and just general wellbeing. So even though I wasn’t an experienced cannabis user, I loved the idea of a drink that got you a little buzzed and didn’t make you hungover the next day. And, uh, in my mid twenties, I thought it was a ridiculous idea. And Jake, you know, when he talked about this and he, to his credit, he really saw this as a category that should exist 10 years before it really did.
[00:03:50] and, uh, I was on the other end of the table saying it was a silly idea because alcohol was enough of a problem for me. Why would I wanna incorporate another drug? [00:04:00] But, uh, everything in moderation, even moderation. It, it seems like cannabis has helped me personally drink half as much as I used to. and occasionally I do have those big, like, you know, 10 drink evenings that I wish I could erase from my memory.
[00:04:15] But, um, they’re a lot fewer and farther between and can is a big part of that.
[00:04:20]Bryan Fields: I, I think that’s so perfectly well said. There’s so many areas that I’m looking forward to diving in, but specifically for our East Coast listeners that are kind of new, what were those early days like for you with can and kind of getting the adoption of getting new users to try a product that maybe.
[00:04:33] Are is a little more uncommon. Right? Obviously everyone talks about the flower being the most popular one, but beverages are kind of up and coming in some spaces. So what are some of those challenges? Like in the early
[00:04:41]Luke Anderson: days when I was at Bain, um, the management consulting firm in London, in the two years before I started can, I worked on a lot of projects helping big CPG companies behave more like startup.
[00:04:58] and the whole [00:05:00] thesis behind that type of work was if you get a cross-functional team of six to eight people in a room. and you narrow the scope of what you’re trying to do to one city, one sku, and one retailer, and you just stay laser focused on that and just keep iterating and iterating until you figure out what works.
[00:05:21] You’ll learn so much by keeping the scope narrow that you can accomplish more in three months on a $500,000 budget. Than a traditional company would in 18 months on a five to 10 million budget. And so we, we deployed that same sort of, uh, structure in Cannes early days and said, let’s try to win with a six pack of this two milligram thc, three flavor.
[00:05:49] Multi pack and then get med men on board in Los Angeles, particularly West la and then, um, try to with the least amount of money [00:06:00] possible, see the sales just like keep happening. And it was a lot of sampling. It was a lot of standing on the street corner and begging somebody to buy the product. I, I think we traded.
[00:06:13] $10 sweatshirts in exchange for a six pack that people actually bought from MedEd next door at our Abbott Kenny popup as a way to drive volume for, uh, a couple of months and. in every conversation we had with somebody after trying the product and staying in touch with ’em over text message or email and learning about whether or not they would be more likely to buy it versus another cannabis product or buy it versus another alcohol product.
[00:06:41] We just kept sharpening our knowledge about at what price point at, at what calorie count, at what sugar content would we be needing to deliver a product for a customer to spend their money and keep coming. and once we saw that the repeat purchase rate in the early days was above 40% [00:07:00] on on certain platforms like ease, we knew that we could raise a bunch of money and then invest that money in truly global expansion because, The need for an alcohol substitute that gives you a little buzz and doesn’t make you hungover, that’s a universal need.
[00:07:15] So, um, and it, and it really extends far beyond, like traditional cannabis consumption patterns. It’s, it’s for people who have never consumed cannabis before, it’s a, it’s a great way for somebody to try cannabis for the first time and not have a bad time. So it was a lot of just like high touch customer interaction high-touch consumer research and, um, fail fast, pivot hard
[00:07:41]Bryan Fields: in those early days, how long did
[00:07:42]Kellan Finney: it take you guys to perfect your kind of early onset technology? Cause I know that’s
[00:07:47]Bryan Fields: a
[00:07:47]Luke Anderson: staple of can. Um, what’s funny is we actually lag behind a lot of the other beverages and how quick the onset is. We report like 10 to 15 minutes where there are some [00:08:00] nano, um, emulsion providers that, that deliver it in like, Or, or 10 we decided to go with an emulsion that was not winding on onset, but that one on being tasteless and odorless because our consumer was less concerned about feeling something really quickly and more concerned that it didn’t taste like weed or remind them of a bad cannabis experience they used to have.
[00:08:28] So we we diligence. , probably 18 different versions of emulsions and then tested them out in our backyard. And we were, we’re more focused on taste than on onset. Um, and that was how we made the decision. So
[00:08:44]Bryan Fields: kind of expanding on the model, the best thing to happen to drinking since drinking. I love that.
[00:08:49] Right? You, you get the feeling, you know exactly who that’s connecting with. So is the, the target customer? Is it for an alcohol consumer who’s looking to adopt? Is it both? How, how would you kind of see that leg playing
[00:08:58]Luke Anderson: out? [00:09:00] So in our early fundraising deck, the one slide that really resonated with people the most was 21 out of 25 adult drinkers said they want to drink less booze.
[00:09:12] And, and so unlike most cannabis brands who are trying to carbon niche within the traditional cannabis consumer, we are looking at the alcohol drinker that isn’t perfectly satisfied with the amount of alcohol they drink. and so it’s a much broader addressable market, but convincing those people to show up to a dispensary is the hard part.
[00:09:37] It takes a lot of hyper-local field marketing. It takes a lot of really creative campaigns that strike an emotional chord with people who fit certain demographic or behavioral or need state profiles and, um, because nobody’s really done it right in beverage, like we, we are. really Trying to figure out how to make this category work.[00:10:00]
[00:10:00] We have been a little bit scattershot with the strategies that we have employed to try to get those people in our ecosystem. Um, and I, and I still think we’re perfecting it. Like we, we haven’t yet gotten the targeting and the retargeting down yet. and the industry evolving as quickly as it is with the dispensary not being necessarily as monolithic as it was before.
[00:10:25] And with this Delta nine derived THC that’s technically exactly the same, but is a lot easier to access being something that we’re seeing grow a lot faster than other parts of our business. That strategy has to shift every three months. Um, so I think it, it took us, it took us, uh, probably. Six months to, to get it right within the dispensary channel in California.
[00:10:52] And it’s taken us four years to really only get it half right for, for what makes it sustainable. So with all those
[00:10:59]Kellan Finney: things [00:11:00] going on, I mean, how do you balance strategically moving forward with like states like New York coming online? Do you utilize that same playbook that you spent So, Learning about in California or do you kind of just try to be patient with the whole thing as this, uh, hemp drive Delta nine thing still, uh,
[00:11:17]Bryan Fields: materialize.
[00:11:20]Luke Anderson: we’re keeping the messaging about the value proposition the same, but where we deliver that messaging and how, whether it’s like big awareness campaign or like, you know, hyper local brand ambassador standing by a table. I think that’s where we look every single week, month, quarter, and figure out how to evolve the messaging or tailor it to the right place in the right time.
[00:11:45] I think. Holistically for our business, New York and New Jersey, just winning the tri-state area from a brand relevance perspective is number one. Um, but cannabis is kind of in a meltdown state right now. And so I [00:12:00] think like overall, we, if, if it was two years ago or last year even, and we had the resources that we had and we had this sort of, Everyone is investing in cannabis, and cannabis is happening kind of a wind behind us.
[00:12:15] We would be much more aggressive and much louder and prouder about how we’re doing it, and because of the macro climate and the industry being in the state that it is. , we have to be a little bit more self and a little bit more crafty about how we live in the tri-state area. So the messages are the same.
[00:12:32] Get a little bit buzzed. Don’t be hung over the next day. Hold something in your hand that you’re proud to hold because it says something about you as a person. And then, um, where we deliver that message, it kind of depends on how the landscape is evolving day to day. We, we care about dispensaries in New York.
[00:12:48] We want to be first on the shelves in, in all of them, but, uh, we’re finding. people are buying our product on subscription from our website a lot more frequently than we [00:13:00]
[00:13:00]Bryan Fields: expected. Yeah, that’s been one of the biggest challenges for me in New York is that I’ve been a big fan of beverages and getting the chance to purchase the products online was incredible opportunity and, and I brought those products to, uh, a friend’s house for, for New Years and for Christmas, and to see their faces for the first time, recognizing that there’s cannabis in here, they asked me pride.
[00:13:17] will I get high on this? What? Like, what should I expect? So I thought the best way to ask you, Luke, is like, for a new consumer who’s trying this cannabis beverage for the first time, maybe they’ve smoked in the past, maybe they haven’t. What would you, you say, from an expectation standpoint, on, on, on how to go about it?
[00:13:33]Luke Anderson: I’d tell everybody, treat it just like a glass of wine or a light beer. You’re never gonna feel more intoxicated off a can than you do off of a glass of wine or a light beer. Unless you have some really crazy tolerance issue and, you know, we’ve made and, and sold and put in consumer’s hands more than 10 million drinks over the last four years, and we don’t get any complaints.
[00:13:58] Um, some [00:14:00] people say they don’t feel anything if they’re like a, a higher potency consumer. , that’s fine. They, they generally think it tastes good and that it like pairs well with a, a different cannabis consumption experience. Um, but very, very seldom do we hear that somebody felt too intoxicated off of one can.
[00:14:18] And because they have these cute little resealable lids, you can drink half a can and close it back up and put it in the fridge if you really want. .
[00:14:24]Bryan Fields: Yeah. That was the experience I got. People thought it tasted incredible and they were then hesitant to believe that there was cannabis inside, and then, then their response was, I need to drink a hundred of these.
[00:14:33] And I was like, well, it doesn’t sound like it’s a problem now. You’re, you’re finding something you like, now you’re understanding the dosing. And I think can is that perfect beverage for those consumers who are newer to the space and understanding that beverage can be an opportunity for them that might be outside their normal thought process of what like a, an expectation is from a cannabis.
[00:14:50]Luke Anderson: Yeah. I mean it’s, to me it’s like great. Cann gets a lot of hate from like high THC consumers that think it’s almost like. I mean, on [00:15:00] one side, legacy operators who think that can is gentrifying cannabis. Like there, there’s something legitimate there that if you peel back the layers about how we built our brand and who we partner with, I think they tend to be a bit surprised and pleased with how respectful we are of the legacy market and legacy operators.
[00:15:20] Um, The people who are just like, this product shouldn’t exist. And it sucks cuz it doesn’t get you as high and like what bad value for your money. My, I have two answers. Like one is we don’t all drink ever clear, ever clear is the cheapest per ounce of alcohol. And if we want it to be as cost conscious as the the cannabis consumers that complain about.
[00:15:43] wanna be on a per ounce of alcohol basis, then like Whitelaw shouldn’t exist because Whitelaw is a lot more expensive per ounce of alcohol, and yet it has a much higher market share of overall alcohol sales than Everclear does. Um, and then the second thing is like, [00:16:00] I don’t wanna buy women’s lingerie. Uh, it doesn’t mean that, like, I don’t think Victoria’s Secret should exist.
[00:16:05] Like I think it’s a legitimate store and a legitimate brand and a legitimate business for women who are looking for lingerie. I’m not the target consumer, but I’m not gonna like go on blast and be like, This, I like my underwear to have longer legs. Like it’s just okay, don’t shop there, . Um, and, and if I go into Walmart, like I’m not gonna go into the toddler’s clothing section cuz I don’t have a baby.
[00:16:31] But it’s not like, I don’t think that baby’s clothes should exist because there are a lot of people out there that do have babies. So I, I, I understand from the perspective of someone who likes to smoke weed and get really high, why can, might feel like a really expensive way to do that, but it’s for somebody who’s trying to drink a little less booze, be a little healthier, and, and really, I think that’s, that’s the lane it should stay in.
[00:16:54] It’s also for
[00:16:55]Bryan Fields: the
[00:16:55]Kellan Finney: individual who’s looking to consume cannabis and not smoke. [00:17:00] You know what I mean? Like there’s a, the healthiest way to probably ingest something is through the stomach, you know what I mean?
[00:17:05]Bryan Fields: Not through the
[00:17:05]Luke Anderson: lump. Yes. And beverages, even though we’re a little bit slower on onset, the fact that you can absorb some of it sublingually before it even gets to the stomach, um, you know, it’s, it’s, it’s healthier for people who are told by their doctors, like, you have to stop drinking alcohol because it’s bad for you.
[00:17:23] And it’s the exact same behavior. So, you know, a 70 year old in Florida can take it on the golf course and just pop it in the cup holder. It’s, it’s really great for them. But for somebody who is trying to wean themselves off inhalable, uh, and maybe the edible like waiting time just makes it a little more difficult for them to reliably predict how high they get.
[00:17:46] Um, can is a, a very buildable buzz and. , whether it’s a two milligram or a five milligram, you can kind of ladder up, um, pretty effectively. And then, you know, we, we launched a subbrand that does 20 to a hundred milligram [00:18:00] strength products, um, called Thunder and lightning. So you got a, a little lightning in a bottle right here, which is a, a yerba and ginger and lemon shot that has a hundred milligrams of thc.
[00:18:13] And so we’re even trying to offer things under the broad. Corporate umbrella of can that meet those consumers where they’re at, just so that, you know, we can not be missing an entire customer segment. But it’s important to know that we wouldn’t put can on the front of this. We, we don’t even necessarily have the CAN logo on this, um, because we want that logo to stand for.
[00:18:40] We’re never gonna get you too high by accident. This is a. Newer to cannabis experience for, for anybody, whether it’s your mom or your grandma or you know, if, if it’s your cousin who judges you for being a stoner. That’s what we want the canned logo to, to be like a, a safe place [00:19:00] for anybody who’s anti-cannabis to have a positive experience.
[00:19:04]Bryan Fields: I think you’ve guys have done an incredible job doing that, especially building the brand because exactly like you’re saying, if, if the dispensary models where the products are being sold, it’s so challenging to compete on those, especially because beverages are, are a smaller portion of kind of the retail outlet and building that brand has to be layered with opportunities and challenges.
[00:19:19] Exactly like you’re saying, every market is different. Not everyone affords those opportunities and beverages is not really the most popular item. So when you’re moving and trying to establish new interests in markets, like what are the creative ways your team’s bringing to the branding?
[00:19:34]Luke Anderson: did the last part of the question again. The what are the ways in which you’re doing creative branding in new markets? New markets like geography or like, like for
[00:19:44]Bryan Fields: example, like in New York, you were saying how with the capital markets being down, you’re still being interested in New York, but you have to be more creative with how you go about entering those markets and how to position that brand loyalty.
[00:19:53] Because can is one of, to me, is one of the, the most recognizable national brands. And I think that’s saying to me, given the fact that how [00:20:00] challenging it is A, to do national brands, but b, it’s a beverage, right? It’s not an edible brand. It’s not a wild, it’s not a. Which would be, let’s say, more popular amongst cannabis consumers.
[00:20:08] So you’re talking about a smaller demographic, but you’re able to establish national brand credibility, which is extremely challenging, but one that should be praised
[00:20:16]Luke Anderson: for. Well, we, we did it by starting hyper local to la and then for a while we were really an Instagram brand and we invested all of our creative firepower and doing really interesting and funny pieces of social content that you could just kind of consume and share.
[00:20:33] We tried to make everything just, you know, standalone as something that felt like it was coming from a friend rather than a brand. I think we’re all tired of brands trying to sell us stuff and, and for a very long time, Ken was unilaterally focused on Instagram and building up a community of people who were like-minded with.
[00:20:52] Funny and engaging pieces of content about like hating alcohol, being afraid of getting too high and, and existing in social spaces in that [00:21:00] weird, in between two substances universe. But then over the last couple of years, we’ve deepened our partnership with a production company called London Alley in Los Angeles.
[00:21:10] And London Alley is one of the most famous music video companies in the world. They did. Thank you. Next for Ariana Grande, they did Industry Baby for Lil Nas X, um, and, and continue to do really incredible high production pieces of commercial content for brands like Pepsi. Um, We’re lucky enough to have them invest in us really early on when we were on the ground in LA and just sampling and meeting people.
[00:21:37] And uh, as of this year, we have formed such a deep partnership that we actually merged our media business with their, um, production business. And now Cann has the ability to deliver on really cool, culturally relevant storytelling moments by integrating. With the product into a music video [00:22:00] or into a, an other brand’s, uh, you know, commercial, the same way that you would watch a movie and you would see someone pull open a drawer and there’s a Smirnoff bottle.
[00:22:11] Or if you’re, you know, doing a, a, a commercial for one brand, you may see somebody wearing an item of clothing from another brand. Or you know, if it’s not a beverage commercial, maybe someone’s drinking a Coke. I think, um, you’re gonna see Cann pop-up Globally in ways that are hard to avoid this year. Probably more often than it has in in previous years, but in more organic and strategic ways while we invest a lot of our resources and money and, and human capital in, on the ground relationship building in New York specifically, so that that global.
[00:22:49] Brand awareness that we’ve invested a lot of, of storytelling firepower in translates into local customer loyalty. Um, and I mean, customers is in dispensaries, in [00:23:00] stores, and also consumers as in, you know, people sitting at their apartment and just wanting to tip on one while watching a movie.
[00:23:07]Bryan Fields: Yeah, it’s so critical because one of the challenges your team faces is that not people are just not familiar with beverages.
[00:23:12] So knowing that that even exists is starting from square one, which is seeing the placement and then building on that habit that this is a brand to trust. This is the establishment of, and this is the low dose credence that comes with it to, to give people that trust when they’re trying the products for the first time.
[00:23:26] It’s
[00:23:26]Kellan Finney: also huge that you guys are like, uh, curbing a lot of the social stigma, right? Like all this branding stuff we’ve been talking about really helps to kind of curb that like,
[00:23:36]Bryan Fields: Devil lettuce, kind
[00:23:38]Kellan Finney: of that whole entire like prohibition error thought process around cannabis. Has that been like a core value or is it like work the other
[00:23:47]Bryan Fields: way around?
[00:23:49]Luke Anderson: It’s almost as important to us as like driving our own brands. Adoption is, mm-hmm. helping move the industry and the social conversation forward. I mean, Jake and I are both [00:24:00] queer and I think we all saw what happened with gay marriage is it was like 20 years ago. It was really taboo. Um, you know, I even got thrown out of a, a bar one time for like calling somebody a, a gay slur in my like heavy alcohol drinking days in my early twenties.
[00:24:15] And it’s ironic to look back on that and see that like I’m married to a man now and I also was really anti weed at that point. And I was like, you know, looking at my cousins who smoked weed and calling them stoners behind their back like that, this sort of closeness and familiarity that you have with a social issue.
[00:24:35] And I do think that cannabis adoption is a social issue, um, and a political issue the same way that gay marriage or reproductive rights are. The, the more thoughtfully you can engage with it. But there are just so many people, like, I think, you know, uh, by some stats, like 80% plus of American adults, like, don’t have a touchpoint with cannabis in a given year.
[00:24:59][00:25:00] And, and so they’re much more likely to have an uninformed opinion about it or think that C b D is like low strength weed. Um, and, and so we’re fighting to try and clarify. A, that cannabis is just as legitimate as alcohol, if not more. And B, low doses of cannabis should be broadly accessible to everybody because they are not dangerous.
[00:25:26] And if people substituted prescription medication or alcohol, With a low-dose cannabis product, we’d probably all be a lot happier and healthier, like just, you know, as a society. And so we understand that it’s really expensive to take on this entire burden of, you know, marketing for the beverage category.
[00:25:45] But we see this as like a, we want to be a friend to everybody in the industry because if we get more people. Pro cannabis period and pro cannabis for the right reasons. With the right social justice policies related to expungement and you know, fair access [00:26:00] to capital for black and brown cannabis entrepreneurs and for legacy operators to have legitimacy in the eyes of corporate cannabis.
[00:26:08] Then everybody wins. ,
[00:26:11]Bryan Fields: how many canned beverages should one expect to consume? Uh, I know with drinking, right, you were saying 10 plus drinks. What would you say from an estimate standpoint? So to give you an example, I had five or six, I think on New Year’s, and I was starting to feel good, and then I started to hesitate.
[00:26:23] Is this one of those curves where it kind of, uh, accelerates up like that or it kind of plateaus? So Luke, what’s your thought process on, on how many to consume if you’re, uh, let’s say a novice cannabis user and just looking to see where
[00:26:34]Luke Anderson: those limits are.
[00:26:38] Ah, man, it’s, um, I never wanna recommend that somebody consume too much because I don’t wanna be responsible for somebody bad cancer. Sure. That’s right. I know I set you for a tough one, but I have, I have had. 10 high boys. Like I I’ve, I’ve had 50 milligrams of THC from a beverage during a dry [00:27:00] January two years ago.
[00:27:01] And I was not outta control, I was glued to my couch and I was eating Cheetos. But, um, I think when I talk to somebody who’s a novice cannabis user, I say, start with one and check in with yourself after 30 minutes. , which is sort of how I think a responsible alcohol drinker thinks about like going to a bar and you know, whether it’s like one drink an hour or one drink every 30 minutes over the course of three or four hours somewhere, you know, with alcohol you have this language of I’m.
[00:27:34] Tipsy I’m, or no, I’m buzzed. You started sober. Then you go, I’m Buzz. Then you go, I’m tipsy. Then you go, I’m drunk. Then you’re ground out and blacked out. But like this, this kind like gradient of alcohol intoxication. We know how to talk about that. We do not know how to talk about that with cannabis yet.
[00:27:56] It’s like you’re high or you’re not. And for me, [00:28:00] I, I described like one can. as if you’re buzzed and like two cans as if you’re tipsy, and then three cans as if you’re drunk. And you probably want to be careful before having cans four, five, and six. Um, because you could be at risk of being, you know, comatose and not wanting to socialize.
[00:28:21] But it’s a lot better than being blackout and like driving a car into a. Yeah, a hundred
[00:28:26]Bryan Fields: percent. I think that’s a type of scale where I think people are, are gonna need to figure out on their own and that’s gonna take more experience, more opportunities with it. And one of the things that I’m concerned about, and I’m wondering what your perspective is, is the mixing of canned beverages and then alcohol, because obviously people are, are, are interested in, in kind of one or the other.
[00:28:44] Do you see that as a problem solution? How do you see that going forward?
[00:28:48]Luke Anderson: We actually did a marketing campaign in partnership with Kate Hudson’s vodka company, uh, over a year ago, where we just straight up encouraged people to do what she was doing, and she was [00:29:00] like, I’m gonna just pour a shot of vodka in my cranberry sage can, and call it like a, you know, cute little holiday cocktail.
[00:29:09] I mean, we can’t officially endorse that as a brand. Like there’s some legal risk with encouraging people to mix cannabis and alcohol, but what I will say, People everywhere, canned drinkers everywhere report that they are moderating their alcohol consumption successfully because of can, like I’m drinking half as much as I used to, and some of them are replacing alcohol with can for entire days or weeks or months at a time.
[00:29:35] But most people are actually alternating their beverages. Like I’m having a cocktail and then, oh, I’m gonna take a break from the the booze and I’m gonna have a can instead. And it kind of mellows me out and it prevents me from getting drunker than I want to get. And I have not talked to anybody who had a like debilitating cross fade from can and booze.
[00:29:58] And I think it’s because this sort of [00:30:00] idea of being cross fade. That’s like if you smoke an entire joint and you’re drinking, you know, shots. Um, but a joint is like 50 cans and so I think, uh, the risk is just a hell of a lot lower. Yeah.
[00:30:13]Bryan Fields: And most users, I think
[00:30:14]Kellan Finney: like that go to a party. Most cannabis users that is like, they go to a party, they’ll have a couple drinks and they’ll go out back and maybe take a couple rips off a joint with some friends.
[00:30:23] You know what I mean? So they’re already kind of go hand in hand when you’re socializing anyways.
[00:30:29]Luke Anderson: Yeah. Yeah. Partying in general is a risk. Even, even sober people at parties are, are at risk. Um, it, it’s, it’s chaos out there. Do you think one of the biggest
[00:30:40]Bryan Fields: challenges the cannabis industry has with beverages is that they’re not able to tell the difference that the alcohol consumer is not kind of built into the total addressable market of what the
[00:30:48]Luke Anderson: potential could be?
[00:30:51] Yes. I, I think that’s a fundamental issue. Um, cannabis industry pundits often think about the universe as people who are [00:31:00] buying cannabis from dispensaries today. And if you’re looking at the data, yeah, 50% of the drinks that are being sold on a dollars basis, there are a hundred milligram THC shots. I think it’s because we’re really early and the people who are walking the dispensary floor are much more likely to need a hundred milligrams of THC at an approachable price point.
[00:31:21] But we have always looked at the universe as just like, People on the earth and, and we’re trying to figure out, you know, if you stop 10 people on the street in New York City, and you said like, do you want to drink less booze? 8 outta 10 would say yes. And if you stopped the 10, same 10 people on the street, or you asked them a follow-up question and said, are you a cannabis user?
[00:31:45] More than 50% of them would say no. And um, and that I think is where the cannabis industry is really missing. The point is, how do we figure out how to educate those people and get them to be interested in cannabis? Cause I tell you what, [00:32:00] we would not have the capital markets in the place that they were if.
[00:32:04] The big cannabis players really made outsize investments in products like Cannes that were helpful to recruit people into the cannabis world away from the alcohol world. I
[00:32:17]Bryan Fields: think that’s so perfectly well said. And the example that I’ve given is that when you go to a backyard barbecue, everyone usually brings a like a six pack of beer.
[00:32:23] And those people there that are drinking beers, maybe eight out of the 10, 10 of them, don’t consume cannabis by smoking. But if you have a cannabis beverage, it might enlighten them to opportunities because maybe they are interested in the product, but maybe they’re anti-smoking. And I think those people are just not considered in those groups.
[00:32:37] And I think. A lot of people on the internet, mainly on Twitter, get their, their hands up in arms about cannabis beverages, because I think for that same fact that they’re not able to think about the, the landscape being the total earth Exactly like you said. So slightly switching gears, what is one product that you, our team will
[00:32:55]Luke Anderson: never build?
[00:32:58] Ooh. Um. [00:33:00] Man. I mean, if you asked me a year ago, I would say we would never make a cannabis beverage above five milligrams of T hc. But we’ve started making them under different brand name. So I think that that’s a boring answer, is like we would never slap the can brand on anything that is more than five milligrams of thc, because accidentally having 10 to 100 milligrams of THC as a first timer, that’s enough to make you badmouth cannabis broadly for the rest of your life.
[00:33:27] And so we care a lot about that. Um, I think, uh, a product that we would never make is one. Artificial. Uh, I, I come from a natural grocery background. I, I care a lot about ingredient integrity and heritage. We pick our lemons from a farm in Sy because they taste better there. We pick our lavender from, uh, a Swiss German flavor house because they care more about mouth feel and making things taste less like bath products and more [00:34:00] like herbs.
[00:34:01] Um, and I think, you know, even our sweetener, like we use agave nectar from Mexico because it’s just like rich and uncommon in beverage and it creates this very unique taste profile that feels a little bit sweeter than it is per calorie to me at least. Um, and I think we are moving past a world in which it’s okay to have like electric blue and bright orange colored drinks because.
[00:34:29] we care about what we’re putting in our bodies. So, uh, I think a product type that we would never make is, is, um, you know, chemically fortified, artificial heavy products,
[00:34:41]Bryan Fields: any fears that the branding that you’ve built with, with can, doesn’t apply to this new product. Where for someone like myself who trusts the can brand, might not be choosing this other product because I don’t know the, the branding behind it.
[00:34:52] Any, any fears
[00:34:52]Luke Anderson: there? Yeah, I mean, like this, this a hundred milligram drink here. , why would I ever want to, you [00:35:00] know, buy something with this logo on it if I’ve never seen it before? Um, yeah, it’s, that is a fear. But with the same sort of ideology that we started canne, we want to do as much like hyper-focused experimentation and see how traction is just on the product before we really light any money on fire in trying to invest in the brand and the storytelling.
[00:35:24] and early indications from this stuff. Is that enough? People are just seeing it on the shelf and they’re like, oh, this looks cool. And then, Repurchasing it because it tastes good. That I think we will start investing in that storytelling and having that brand take on a life of its own someday. Um, someday soon, hopefully.
[00:35:42] Uh, but, but yeah, it’s a, it’s a very legitimate fear. Like we haven’t built any brand other than Cannes, and so who are we to put that out there and, and hope that it does well? Um, jury’s still out, but signs point to, um, It was probably a good bet. Uh, these products, you make more [00:36:00] profit dollars off of them.
[00:36:01] The customer is more likely to be interested. To them, it’s not as hard of a sell, and as long as we differentiate in our value prop and, and here it’s like we’re using really natural ingredients and it has caffeine in it. I love caffeine and THC together. to me. If even in advance of a brand being resonant with a consumer, people will buy something if it delivers on what they’re looking for and being stoned and high energy, like that’s a use case that not very many people are doing super well.
[00:36:29] So at least we’re carving out a niche there and, and hopefully we’ll be able to expand on that storytelling for the Thunder and lightning brands this year. Do you
[00:36:36]Bryan Fields: guys notice a difference,
[00:36:37]Kellan Finney: like in taste geographically speaking, in terms of like products that move better
[00:36:41]Bryan Fields: in different
[00:36:42]Luke Anderson: region? Yeah, in LA and New York, our more editorial flavors do super well.
[00:36:48] Um, like in LA we had this cloudy apple rhubarb, no added sugar. 10 milli, or sorry, 10, uh, calorie drink that was like a top top seller for two [00:37:00] months before we ran out. And when we offered a similar product in Illinois and Massachusetts, it kind of sat on the shelf. Um, I think LA and new. in particular, especially when we’re like looking at the Hollywood demographic or the the Healthy Hedonist customer segment in New York.
[00:37:18] The people go into Soul Cycle but are still like going out clubbing. They care more about sugar content and calories than I think your, you know, random family in the Midwest. Um, and. It’s very difficult to build a global brand and have so many different skews with different nutritional and flavor value props existing in, in separate spaces.
[00:37:42]Bryan Fields: Cannabis lounges a an asset for the fight forward of adopting cannabis beverages.
[00:37:49]Luke Anderson: Huge asset. I just wish there were more of them that were just like edible and beverage focused. Cuz I think that there is some there. There is a lingering stigma around [00:38:00] rooms filled with smoke and the cannabis smell. And I think edibles and beverages are really powerful because you don’t necessarily have to deal with that.
[00:38:08] But it’s very hard to make, uh, you know, an on-premise lounge economically viable as a business without including the high volume flower category. Um, But I think that we’ll, we’ll start to see more pop up. Like if you’re seeing non-alcoholic booze shops pop up, eventually you’ll see like micro-dose only cannabis lounges that are like more for sober ish people than for cannabis people.
[00:38:38] And I think those are going to be really interesting social spaces. My, my business partner Jake, he is dreamed about what a, uh, non. Bar club that allows you to microdose cannabis and psychedelics only could be like, and I think, you know, we’re not that far off from seeing those pop up in places like Oregon and [00:39:00] Colorado.
[00:39:00] Um, I, I think, you know, Amsterdam was a really interesting V 1.0 social experiment, but it was so focused on like tripping balls and like, you know, smoking or eating a space cake that we didn’t really get to see what the moderation version of that looked like. But I think we’re, um, you. five years away at AT, at most.
[00:39:19] Yeah, potentially.
[00:39:19]Bryan Fields: And I think it also helps with the adoption, right? If you can get a cannabis beverage in a bar and if it’s on tap. I mean, it just helps with people seeing it and recognizing that it is part of normalization of the product. Yeah, exactly. What is the most misunderstood, most misunderstood thing about your company?
[00:39:40]Luke Anderson: Oh, I mean, people say that we’re like cocky and that we’re like, you know, full of ourselves and we’re like, we’re just trying to survive. Like I, I mean, most beverages like. They really struggled to get off the ground. There have been huge companies that have invested hundreds of millions, if [00:40:00] not billions of dollars in trying to do microdose, THC beverage at scale and have really struggled.
[00:40:06] And we’re an independent, like, we’re just like two gay dudes in LA that like tried to make a we so to work and it’s working like, be nice to us . Um, I, I think like, um, You have to pound your chest really hard and try to get the word out there about something when it doesn’t exist. Otherwise, it doesn’t exist, period.
[00:40:29] And, and we believe that everyone stands to gain so much when it exists that we’re a little bit louder and a little bit more, um, Hard to miss when it comes to our marketing and some of the statements that we make. But it’s in service of the industry’s evolution. It’s in service of like a public health and safety issue when it comes to alcohol and the harms that it does on, you know, families everywhere.
[00:40:52] Um, and so I think like if you just take a glimpse at Canon, you have your own biases about cannabis, you might think. [00:41:00] Well, you know, that company’s annoying. But, um, you know, we’re, we’re just, um, we’re just, uh, a couple of dudes who tried to make a startup work and continuing to try to make a startup work.
[00:41:11] And so I think I’d encourage people to just peel back the layers of the brand and see how much heart and soul it has. Like, we care a lot about marginalized communities because we know what it’s like to be queer in business and be shut out of rooms or told we’re not allowed to talk about our partners.
[00:41:26] And, you know, we’ve been called. F bombs behind our backs, um, if we appear too feminine in a pitch meeting. And, and that kind of stuff sucks, but we’re also still two white dudes who understand just how much privilege being a white dude in cannabis has afforded us. And we’re really thoughtful and intentional about how we build our brand around intersectional, marginalized communities, specifically the ones that have been armed by the war on drugs.
[00:41:53] And so I, I really feel. people sometimes misunderstand can as [00:42:00] like, it’s a, it’s a Gwyneth Paltro weed seltzer for rich moms in Beverly Hills, but, and yes, like they do like our product and Gwyneth is an investor, but I think, um, our product is adored by a lot of people who struggle with like pill addiction and alcohol.
[00:42:17] And at every income level of every demographic of every age of every. Gender identity and sexual orientation and um, I think there’s something really special about that. What is
[00:42:30]Bryan Fields: well said. Yeah. Really well said. Uh, what is one concept you learned operating in the cannabis industry that would shock or surprise others?
[00:42:39]Luke Anderson: sometimes you don’t get paid . Like, it’s like, uh, in, in business you expect that if you do something that people give you dollars for it. But in cannabis, the norm is like maybe . And so, you know, we’ve had people run off with a hundred thousand dollars and never come back like we’ve had, um, you know, dispensaries shut down and, and just like have to write off a lot of [00:43:00] bad.
[00:43:01] Um, we have made really tough decisions to weather storms and trust that partners who haven’t paid us in a year will eventually pay us. And I think there’s something very, very cool about that when, um, when we link arms to somebody who’s in a financially tough position and say, we’ll wait for you. Like, we’ll, we, we believe in you.
[00:43:21] Um, but it makes it really hard to do business in cannabis because the, the trust factor just isn’t there. And. , a lot of professionals in food science and manufacturing and facility management and distribution in beverage, period, they’re afraid to come to cannabis because it’s just not a safe place to put your career yet.
[00:43:40] And so you end up with a bunch of really unsophisticated operators who just don’t know how to do basic things that in consumer packaged goods are just. Like, you know, clockwork and it creates a really structurally inefficient environment. And I think we’re in one of those moments right now where that bubble has burst yet another time.
[00:43:59] Um, [00:44:00] but I think, you know, we should still look at that with a hopeful lens. Like when the tech bubble 1.0 or 2.0 burst, it’s not that the internet wasn’t valuable, it’s that we didn’t need like a million geocity style websites. Um, and MySpace like it, it’s about. Figuring out like what people actually want to pay for and what people are actually using and enjoying.
[00:44:22] And, and so I, I’m still incredibly long on the near term of cannabis. I think we’re gonna see a really rapid turnaround in the next three to five years and, and the strong, um, brands that, that are delivering on something for consumers will survive it.
[00:44:38]Bryan Fields: Are there any assets, efforts or strategies you wish
[00:44:42]Luke Anderson: people paid more attention?
[00:44:47] I think, um, Jake and I were taught how to do a lot of business analytics at Banyon Company, and we’re really grateful for that education because they focus so much on [00:45:00] consumer loyalty and whether or not somebody says, Six out of 10 or eight out 10 or nine outta 10, even those mean three completely different things.
[00:45:12] If you’re answering a question like zero to 10, how likely would you be to recommend this product to somebody else? And I wish that people, before they put their products into the market or develop their dispensary concepts or whatever ancillary services they were providing, they applied that traditional.
[00:45:31] it’s only worth doing something if people are going nuts for it, like nine and 10 out of 10. Um, that’s, that’s what Bain classifies as a promoter. Um, if you say seven or eight, you’re technically neutral, um, or, or kind of passive. And then if you say six or below, you’re actually actively destroying that brand’s equity because when you talk about it, even if it’s like vaguely not positive, it turns people off.
[00:45:59] We should only really [00:46:00] have products out there in the world that like, wow, they’re target customer. And I think there’s a lot of cannabis products out there that are just kind of like doing nothing for nobody. Um, and, and I don’t know, we, we don’t need another, uh, cheap flower brand. I don’t think we need another, um, like, you know, a hundred milligram chocolate bar.
[00:46:20] I think, I think we need differentiated and unique products that people say, I’m nuts for this, for this. , it’s the future roadmap. Yeah. For can. Yeah. Um, , I think we are going to be doing, um, I, I think we’ll actually do a blockbuster edible in the next, like three to five years. Um, I think it, it would take partnering with a really like-minded edible manufacturer who finds value in the CAN brand.
[00:46:54] Um, one of our investors is like, you should, you should really do candy with two Ns [00:47:00] and edit that part. End it. Um, and, and I think, um, you know, we, but more importantly, perhaps we think about ourselves as a consumer brand and not necessarily a cannabis brand. I think we might do a low A B V alcoholic Seltzer at some point with really interesting flavors.
[00:47:23] That just is, uh, getting you a little less drunk. Um, I think there’s a market for that. I think. I think this whole like healthy, but also like fun, consumer can find a delight in moderation on a lot of substances. . And so I think as you see can evolve, you’ll see us evolve equal parts, cannabis and non-cannabis.
[00:47:45] And within cannabis, yeah, the beverage and the Cann brand will always be the hero, but I think you’ll start to see us transition into more low dose. Um, Alternative categories as, uh, the opportunities
[00:47:57]Bryan Fields: arise. I will say,
[00:47:59]Kellan Finney: your guys'[00:48:00] beverages are just awesome without anything added into ’em from a flavor perspective, you know what I mean?
[00:48:03] So they, they do a good job. So I like that thought
[00:48:06]Bryan Fields: process
[00:48:07]Luke Anderson: plain to their . We handpicked the ingredients very carefully. It sounds like it. Jake and I got in like, you know, multiple friendship ending fights over six or seven drops of lavender or like, should be used honey. Do or cantaloupe for this? Like did you bring in a third
[00:48:23]Bryan Fields: party to to be the
[00:48:24]Luke Anderson: moderator?
[00:48:26] Yeah, we, we had a food scientist partner that we worked really, really closely with for a few years, and she really tragically died this last year. Um, but, um, we, you know, we had an amazing balance in the room with a lot of industry experience and I think, um, we’ve learned and, and to any co-founder Buk, you always want to have like that third person in the room.
[00:48:53] Check you on your bullshit and your relationship dynamics. Am I allowed to swear on this? Yeah. can do whatever you want. [00:49:00] The the, uh, um, yeah, so, so like I love thinking about decision making forums and iPods and, and if you can make a three circle Venn diagram of people with different perspectives and then find something that all three of them, like Chance Theara, it’s.
[00:49:19] That’s why
[00:49:19]Bryan Fields: I asked who that third person was, cuz I’m sure you both felt very confident about that side, but someone had to be that third party to say moderat and say, I think we’re gonna do six and a half drops. Lavender .
[00:49:29]Luke Anderson: Yeah. Well, well I mean, even when it came to like running our Instagram in the early days, like Jake and I had a meeting with Eliza Robson who was an incredible designer and content strategist.
[00:49:39] Um, and we just met once a week. Argued about every Instagram posted if it was a consumer product, and we tried to like, meet in the middle. And, you know, if a Gen Z woman and, you know, uh, more cannabis familiar millennial dude, and then like, uh, non-cannabis millennial dude all [00:50:00] found common ground, um, then the, the content performed well.
[00:50:05] So I think that sort of ideology was really, um, a, a powerful. , uh, for, for us to deploy in all aspects of business.
[00:50:13]Bryan Fields: I believe it. When you started your journey in the cannabis space, what did you get? Right, and most importantly, what
[00:50:18]Luke Anderson: did you get wrong? I think Jake got the product right from a dosing perspective in, in terms of like how do we differentiate from what’s on the market and, and get like real traction.
[00:50:31] Um, I think what we got wrong was the timing. Uh, I think we thought federal legalization would’ve happened this year. Uh, I, I thought it was like utterly non-controversial and that Biden could probably use a win. Um, but if we can’t even get, say, banking passed, then we’re in a whole lot of trouble for a few more years.
[00:50:51] So I think, um, you know, timing of capital raises, timing of, uh, penetrating certain markets. I think I would [00:51:00] like to go and redo some of those decisions, but, um, you know, you make a million mistakes when starting a company, and I think Uber and Airbnb got a lot wrong, but they, they got more right than they did wrong.
[00:51:11] And I hope that we can say the same thing in 10 years. Before we
[00:51:15]Bryan Fields: do predictions, we ask all of our guests, if you could sum up your experience in a main takeaway
[00:51:19]Luke Anderson: or lesson learned to pass onto the next generation, what would.
[00:51:24] oh my God. Only start a company, especially only start a company in cannabis if you are willing to give up your entire life for it. It is. It is not something that I was prepared for the, you know, my family looks a lot different now. My friends look a lot different now. My day-to-day. What I have to do in order to survive is not at all what I would’ve expected.
[00:51:55] Um, and so I, I would, I would second guess, [00:52:00] uh, wow, this would be cool type of decision. And I would only do it if you’re like, I could not live with myself if, if, um, if I didn’t devote my life to this. All right. Prediction. Luke, I’ve given you
[00:52:14]Bryan Fields: a magic wand. You can change anything. How do you unlock cannabis beverages so that they can reach
[00:52:20]Luke Anderson: their potential?
[00:52:23] So there’s this thing called like over-the-counter drugs in C V s, and there’s stuff that you have to go wait in line and talk to a pharmacist to get. . A lot of the times, the stronger stuff is in the back and the weaker stuff is in the front. In alcohol, there’s beer and wine only establishments, and there are full bars.
[00:52:45] Cannabis needs to have a split where the lower dosage products that are not as dangerous are a lot more broadly accessible and unfortunately, The first wave of that sort of split was [00:53:00] CBD versus THC But that’s like saying LaCroix and White Claw are like, you know, two sides of the same coin. Like one has booze, one does not, and, and so it’s not about like the absence or presence of THC that makes something safe.
[00:53:16] It’s the potency. So I think potency based regulation and allowing for, you know, liquor stores, on-premise, consumption, places convenience, grocery, like what we’re seeing with the Delta-9 stuff in Minnesota, Texas, New York, like. I think that should be just like a sweeping national regulation. And it shouldn’t be limited to derive from hemp.
[00:53:39] It should be based on like the scientific architecture of the product. And if we can get people on board with low dose cannabis being everywhere, there won’t be so much stigma around like marijuana versus industrial hemp. Um, you know, cannabis is cannabis, THC ist, hc. Just call paid is paid and regulate it based on how strong it’s [00:54:00] Kelly.
[00:54:01]Bryan Fields: Uh, I completely
[00:54:02]Kellan Finney: agree with Luke. Um, I think, I mean, like right now you can’t go buy 99% ethanol. We can buy 99%, uh, T H C A in a dispensary. Um, but I do think that
[00:54:13]Bryan Fields: the, uh,
[00:54:17]Kellan Finney: widespread adoption of cannabis beverages, like placing him next to alcohol in like your standard grocery store, I think is probably the.
[00:54:26] um, easiest thing to change, uh, culturally at least.
[00:54:31]Bryan Fields: What do you think, Brian? I think economies of scale are a real thing, and I think as inter helps, interstate commerce comes online and the price is able to come down because we’re able to put all the manufacturing in one central location. I think that’ll allow for other consumers who may be interested, but maybe more price conscious.
[00:54:46] To drive these products. And I think the first step is the ability to being direct to consumer. And I think what your team’s doing is an incredible thing. And I think, you know, just putting the, literally, like you said, the cannabis beverage on your back and pushing forward, I, I, I think is really important because I, I [00:55:00] think the beverage category is, is in the earliest stages for the cannabis industry and only expected to absolutely skyrocket.
[00:55:05] Seems continue. So Luke, for our listeners, they wanna get in touch, they wanna buy canned beverages. Where can they find.
[00:55:14]Luke Anderson: ken.com with two Ns.
[00:55:17]Bryan Fields: We’ll link it up in the show. Thanks for taking the time. This was fun.
[00:55:20]Luke Anderson: Thank you.
