Typically, professional investors would be wary of betting on a category that faces an array of regulatory hurdles in state legislatures and an uncertain future at the federal level. Fortunately for three hemp-derived THC brands, that has not been the case, writes senior reporter Lukas Southard. Cali Sober, Flowerboy and Magic Cactus have all recently found venture capital firms willing to capitalize their growth in rounds ranging from $1 million to $1.75 million. - These small raises might not seem like a lot compared to the tens of millions that energy brands pull in, but the sheer fact that VCs (some investing for the first time in hemp drinks) from different sides of the political spectrum are buying in shines a sliver of optimism on the category’s future.
“I’m still super excited,” said Chrissy Liotta Edwards, who runs a self-described “pro-freedom, very conservative Trump Republican” special-purpose investment vehicle (SPV), Arsenal Venture Partners. The SPV invested recently in Dallas-based Cali Sober’s $1 million round and brought with it two other investment firms to add to the raise. “Mainstream consumer VCs are now coming in with enough comfort to make a large bet,” said Magic Cactus founder Jonny Locarni, who recently closed a $1.5 million round with investment from Tonic Ventures (Olipop, Slate Milk and Leisure Hydration) and Listen Ventures (Calm, Public Goods and Jolie). Locarni believes that once the door is opened, more institutional backers will join in. In the case of new brand Flowerboy (the THC offshoot of Kyle Cooke’s canned cocktail brand Loverboy), tapping a cannabis industry investor has helped set the stage for the brand’s expansion from DTC sales to beverage-alcohol retail. Flowerboy is raising a $1.75 million round with veteran cannabis investor Delta Emerald Ventures. Cooke is currently transitioning his DTC-first THC drink brand by tapping his Loverboy network of beer wholesalers, who he believes will build the brand in retail. “We benefit from five years under our belts working with beer wholesalers. We understand the quirks, the needs, the wants, and the blocking and tackling that will make those relationships successful,” Cooke said. Read the full story on BevNET to learn how these brands embrace retail despite ever-changing regulations. | 
