CannaKorp is a Stoneham-based startup that has earned the title of “Keurig for weed” because of the single-use, pod-based cannabis vaporizing system it has developed, and investors are lining up.
The company announced on Thursday that it has closed a $4.1 million Series A round led by private equity firm Singularity Capital Management, which focuses on the cannabis industry. This brings total funding to $5.7 million.
The funding will be used to launch the company’s CannaCloud vaporizing system in select markets where cannabis is legal later this year. The round will also help the company build out a partner network of dispensaries and processors, which CannaKorp will rely on the distribute and sell the product.
James Winokur, co-founder and CEO at CannaKorp, told me its first markets will be Colorado, Washington state, Oregon, Massachusetts and Rhode Island. All but Rhode Island allow both medical and recreational cannabis use out of those states. The company will also be launching the product in Canada.
Winokur said both its Series A and seed rounds were oversubscribed, representing the level of interest investors have in the company.
The first units of CannaCloud are expected to roll out in April.
The CannaCloud system is expected to retail around $150 to $170, with single-serving pods expecting to cost between $6 and $10 on average depending on the strain and other factors. In the United States, both the systems and pods will be sold at partnering dispensaries. In Canada, everything will be sold online.
For comparison’s sake, a single pod would be equivalent to one pre-roll joint, or one gram of cannabis, which Winokur said might cost $10.
When I asked Winokur, a former executive at PTC, whether CannaCloud is meant for medical or recreational users, he said the company is focused on providing it as a “wellness” product, whether someone has been prescribed cannabis by a doctor or if they’re simply interested in how it can treat ailments.
“We’re really focusing on ‘how do we educate the mainstream that cannabis has a beneficial effect?'”
“We’re really focusing on ‘how do we educate the mainstream that cannabis has a beneficial effect?’” Winokur said. “And that’s what we’re really after.”
Winokur said there are two groups of people they’re targeting: those who already use cannabis and want to consume it in a more convenient and controlled way, and those who haven’t tried it yet and are curious but may not have wanted to consume cannabis through other means that are currently available.
When I watched a promo video where a woman inhales vaporized cannabis using CannaKorp’s clean and slick-looking system, my reaction was how normal the company made cannabis consumption look. For that reason, I can see CannaKorp being a bigger hit with, well, let’s just call them “weed newbies.”
“It helps normalize the industry” is a comment Winokur says he had heard from people because of the CannaCloud’s design. “That’s what we’re hoping for,” he said, noting many others have come before the company in helping normalize it.
Anyone familiar with the history of Keurig, the device that serves coffee through single-serving pods, knows about the sustainability concerns with such a model. After all, Keurig founder John Sylvan himself went on to regret how wasteful and environmentally harmful Keurig’s K-Cups are.
With the CannaCloud, however, that shouldn’t be a concern. Winokur said its single-serving pods will be made out of aluminum, which can be recycled. “By nature of what we’re doing, plastic wouldn’t be acceptable for the pod,” he said.
The CannaCloud was invented by co-founder Michael Bourque, who’s also a former PTC executive. Bourque conducted experiments and analyses, Winokur said, to realize that “inhalation is the best method for most conditions and ailments because it does not combust the plant and it acts very fast in the body.”