• Jeffrey Friedland

CBD-Infused Sparkling Water Producer Sweet Reason Raises $2.5 Million

Investment Confirms the Lack of Investor Concern Regarding FDA Prohibitions of CBD as a Beverage Additive

August 16, 2019 - Launched last year, Sweet Reason manufactures and sells unsweetened sparkling water with natural flavors and 7 mg of CBD. The CBD is extracted from Colorado-grown organic hemp.

Sweet Reason’s products, which are sold in glass bottles, are available in approximately 200 retailers in New York, as well as online.

Sweet Reason is using CBD to not only attract consumers, but is also taking advantage of a consumer trend. Many consumers are avoiding sugar and other ingredients in traditional soda products. This had led to the popularity of sparkling water beverages, most notably those manufactured by LaCroix.

Sweet Reason recently raised $2.5 million in a financing round led by Lerer Hippeau. Other investors who participated included RiverPark Ventures, Max Ventures and Subversive Capital.

The principal use of the funds is to expand Sweet Reason’s sales by ramping up its sales strategy, including expanding its salesforce. With this additional capital, Sweet Reason will likely maintain its early-to-market advantage, especially in comparison to other beverage companies who have been reluctant to enter the CBD-infused beverage market and are sitting on the sidelines.

In announcing the investment, Hillary McCain, Sweet Reason’s founder stated, “I started “I believe beverages will play a key role in the future of cannabis because so much of our social lives and rituals revolve around beverage.”

Phyto Intel’s Conclusions

While CBD has become increasingly popular as an additive in food and beverage products, the ingredient is federally illegal for use in food and beverages nationally. This hasn’t stopped beverage companies, including Sweet Reason, from launching CBD-infused beverages.

Many Consumer Package Goods (CPG) companies interested in adding CBD to their food or beverage products are waiting on guidance from the Food and Drug Administration (FDA). Many other CPG companies, including small companies such as Sweet Reason, are launching CBD-infused beverages now, since many states allow CBD-infused food and beverage products, a trend that is growing.

About Phyto Intel

Phyto Intel provides strategic assistance to enable businesses and entrepreneurs to enter and succeed in the fast-growing and fast-evolving legal cannabis, hemp, and CBD markets in the United States and globally.

Phyto Intel also provides market intelligence, product formulation services, and “go to market” strategies for Consumer Packaged Goods (CPG) companies and CBD producers interested in developing, formulating, manufacturing and marketing food, beverage, and cosmetic products containing hemp seed oil and/or CBD.

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