CBD boom: Weller secures US$3 million investment for expansion
26 Jul 2019 --- US-based CBD-infused food and beverage producer, Weller, has closed a US$3 million funding round led by Brand Foundry Ventures, a venture capital firm that invests in “innovation-driven” brands. The funding will be used to help scale up production to meet increasing demand, as well as to step up sales and marketing efforts.
The company is rapidly expanding distribution and looking forward to accelerating its growth, adds John Simmons, Co-Founder of Weller. “Our national retail footprint has increased to over 1,000 stores; we’re seeing a huge wave of interest from retailers across all channels of trade.”
Weller products are currently available in 25 states and the company has experienced growth across online and retail channels since launching in 2018. It is set apart from other CBD product manufacturers thanks to its clean lineage and transparent third-party testing, the company says.
The CBD market is bursting with NPD despite regulatory challenges."Our decision to invest in Weller stemmed from our confidence that Weller’s brand proposition was innovative and would be a game-changer for consumers. Our team at Brand Foundry saw an opportunity to lead a new, multi-billion-dollar CBD category and thought that the straightforward and relatable brand voice would resonate well with potential customers, which it has,” said Andrew Mitchell, General Partner of Brand Foundry Ventures.
Bryan Bulte, Managing Partner of LivWell Ventures, notes that the business looked at over 80 companies in the CBD space and was looking for a brand that was approachable to the everyday consumer, built by a seasoned team with uncompromising standards of quality from seed to packaging. “We saw a lot of tinctures and a few brands that were doing some interesting things, but fell a little short on either taste, format, or quality, but Weller stood out.”
Other investors include LivWell Ventures, Great Oak Ventures, CanopyBoulder, and 7Thirty Capital, along with personal investments from Justin Gold, Founder of Justin’s, and Bill Weiland, CEO and Founder of Presence Marketing.
The CBD market is bursting with NPD. Recently, US-based drink company Good Day debuted a line of CBD-infused beverages. This uptake in interest is driven by a range of different consumers who are drawn to the category.
According to Innova Market Insights, cannabis-derived products can be divided into three broad user clusters. First are younger adults, aged 19 to 25, who lean towards products higher in THC and seek new products and culinary explorations.
Second, are medical users who seek consistency and quality of experience for their conditions. They cross all age groups and prefer blends or higher CBD content. Lastly are those focused on health and wellness, which is driven by the function and fit of cannabis products into lifestyle choices. Additionally, while users under 35 years of age are the largest demographic overall, the fastest-growing group consists of those over 55.
However, the explosion of this new CBD market is not devoid of regulation issues and concerns. Responding to the Food and Drug Administration’s “slow” engagement with supplying regulatory information, the Center for Science in the Public Interest urged the agency to assert a more active role in regulating consumer health and safety with regard to cannabis use.
Meanwhile, the FDA recently reprimanded US-based Curaleaf Inc., for illegally selling unapproved products containing cannabidiol (CBD) online. The company had been making false claims that its products treat cancer, Alzheimer’s disease, opioid withdrawal, pain and pet anxiety, among other conditions.
Edited by Katherine Durrell
