Cannabis beverage maker Cann enters the New York retail market

Cannabis beverage maker Cann is cracking open a new market, entering New York retailers for the first time this month as recreational cannabis retailers begin to open up in the state following legalization in 2021.

New York is the seventh state where Cann’s social tonics, containing 2 mg of THC and 4 mg of CBD, have entered retail since its debut in 2019. Its cannabis-derived bevs will hit dispensaries like the newly opened Union Square Travel Agency this month, while its hemp-derived products will hit bodegas and specialty shops like The Alchemist Kitchen and Blue Star Deli.

• We know, we know, these laws are very confusing. To clarify: In New York, products containing marijuana-derived THC can only be sold in dispensaries, while other retailers can apply for hemp licenses to carry products containing hemp-derived THC. Cann makes both versions of its product to comply with laws like these, Cann co-founder Jake Bullock explained.

Bullock told us that the brand looked for retail partners that are “really collaborative” and “open [and] interested in the growth of the industry.” While early in a cannabis market, dispensaries may focus mostly on flower and concentrates (used in vape pens), retailers educating consumers on micro-dosed products offers an entry point for new consumers, he noted.

“You can only sell so much strong weed to high-tolerance consumers for so long, right?”

he said. “The growth really comes from that mainstream consumer that's not even thinking about cannabis.”

In New York, Cann will also look to capitalize on its surprisingly large contingent of New York Cann fans: Beside its home state of California, New Yorkers make up the largest percentage of its Instagram followers and email list subscribers, Bullock noted, even though it wasn’t sold there until now. The move will help the brand establish itself on the East Coast, where it had thus far solely been available in Massachusetts.

Social climber: While Frank Sinatra would have you believe that if you can make it in New York, you’ll make it anywhere…that’s not exactly true in the cannabis space. Each state has different laws, and it can be pricey to be in compliance, which is why Cann raised $27 million in funding in February 2022 to enter new markets.

• Growing state by state is also tricky because Cann has to secure a different manufacturer in each state because it can’t cross state lines with its product. It works with a hemp processor outside of Syracuse to service New York.
• Plus, it has to tailor its packaging to meet packaging compliance requirements that vary from state to state. Creating the version of its beverages with hemp-derived THC is also more difficult and expensive than the cannabis-derived version, Bullock noted.

But there’s a silver lining to all these different laws. Last summer, Cann debuted in Minnesota, a state that only allows the sale of beverages and edibles made with hemp-derived THC. Minnesota is the first state where Cann has sold its bevs alongside alcoholic ones in bars, and restaurants, Bullock said, which has helped it connect with consumers over its positioning as an alcohol alternative.

• The growing distribution has paid off: The company’s revenue increased 232% between January 2022 and January 2023.

“Even though we’re slow to see movement at the federal level on cannabis legislation, across a number of fronts, we’re starting to see the states doing really creative things,” Bullock said.