Bay Area-based K-Zen Beverages Inc., a cannabis-infused drink manufacturer, just announced they have received $5 million seed funding from DCM to help kickoff production. The seed funding for K-Zen Beverages is the second cannabis-related investment DCM will be making. The first was the funding of an on-demand cannabis delivery platform called ‘Eaze’.
K-Zen is only a month old and yet to roll out any product. However, the company is working on three drinks in three different flavors—wild berry, pink lemonade, and lemon chamomile—which will be sold as shots. To date, there are still few cannabis-infused brands, although popularity has been building. According to Canaccord Genuity, an investment bank, the annual sale of marijuana-infused beverages in the U.S. could reach $600 million by 2022. The field is still wide open to investors and manufacturers.
Due to regulatory challenges, most cannabis-infused drinks still lack THC, the compound that gives marijuana its psychoactive properties. Instead, manufacturers infuse drinks with CBD. Most cannabis-infused drink manufacturers are banking on legislative changes to diversify their production. Currently, the use of recreational and medical marijuana is legal in 34 states in the United States—and more are expected to follow soon. K-Zen will produce drinks that include CBD and THC as well as one brand that will feature THC exclusively.
According to Judy Yee, the cofounder and co-CEO of K-Zen, the company is targeting busy people who are exploring new ways to “bring joy into an active lifestyle”. K-Zen is planning to roll out its products this summer so that they can be available to dispensaries, starting with California.
K-Zen may be an early bird but anticipate more startups and beverage manufacturers positioning themselves to have a share of the market. Currently, Trukino, a Seattle-based company is already making apple cider with THC and CBD varieties. California Dreamin, is another beverage manufacturer that sells THC-infused sodas. Those who have tasted this soda says it tastes like tangerine.
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