Drinking Cannabis with Uncle Arnie's
Drinking Cannabis with Uncle Arnie's
Mindset Capital Leads $4 Million Investment Round into Uncle Arnie's
We are very bullish on the future of cannabis beverages and believe that hemp beverages could be the killer app or the iPhone moment for cannabis to truly explode higher in terms of consumption. We have made a series of investments and even launched and closed a hemp beverage venture fund, the Mindset Venture Fund, earlier this year to capitalize on this thesis. And some of our portfolio companies are starting to break out.
Today, I want to introduce you to my new favorite uncle: Uncle Arnie’s.
Since we invested in January, we have been blown away with just how exceptional Theo, Alberto, Jimmy and Assaf are as founders and operators. They are simply knocking the cover off the ball. Uncle Arnie’s is a fun, happy, value brand that delivers a good experience at an unbeatable price that it is being embraced by consumers.
We believe Uncle Arnie’s is special because they are not only killing it in the hemp beverage space, but they are also crushing it in the regulated dispensary channel. Uncle Arnie’s is proving that a 5 or 10 mg THC hemp customer is a very different customer than a 100mg dispensary customer and the company can cater to both.
On the hemp side, despite being a relatively late entrant into competitive markets, they have rapidly gained market share and grown at breakneck speed. The keys to their success besides the clear talent of the executive team, is they know they are a fun value brand that is non-carbonated in a field of competitors trying to capture the high-end consumer with fancy seltzers.
The company has also come out with a small 10mg shot that we think is a potential blockbuster in the making. This shot is akin to a 5-hour energy shot that you see in liquor stores, convenience stores and gas stations near the cash register. And the retail price for their 10mg shot is $2.99, which is simply an amazing value proposition to consumers.
We are hearing that some stores in Minnesota cannot keep their supply in stock and that customers are coming to buy full cases of the shots.
In the regulated channel, the company is the leader in California and does a thriving business there. More recently, Uncle Arnie’s launched in Illinois in partnership with Green Thumb (OTC: GTBIF), one of the largest US cannabis companies. We understand that Uncle Arnie’s quickly became one of the best-selling products in Green Thumb’s dispensaries. In fact, Uncle Arnie’s just won the Best in Grass award for best beverage in Illinois. Further, the ties between Uncle Arnie’s and Green Thumb are blossoming as Green Thumb just hosted the company for a party to show off Uncle Arnie’s to budtenders and to company staff.
We made our first investment in the company in January. After hearing from the Arnie’s team that they were grappling with shortages of inventory due to soaring demand, we approached them about investing additional capital to put more fuel on the fire. We quickly came to terms and have now invested at a valuation more than double the valuation set in January. And a large strategic investor invested right alongside us (we have promised to keep confidential the identity of the investor). The total raise was $4 million in fresh capital, setting up Uncle Arnie’s to meet explosive demand in 2025.
With multiple growth opportunities from new regulated dispensary markets, to continued hemp beverage growth, to a big push in Direct-to Consumer (DTC), new products such as their new shot format and several new key hires, Uncle Arnie’s is poised to have a blockbuster 2025. This is why Uncle Arnie’s is Mindset Capital’s largest beverage investment.
Uncle Arnie’s is showing that hemp and regulated cannabis can both exist and thrive and that they serve different customers. They are also showing just what kind of demand there is from consumers for cannabis beverages.
So, look out cannabis world, your fun uncle is bursting on scene and breaking out by delivering delicious drinks at an unbeatable price. I love it, but most importantly, consumers love it even more.
P.S. If you would like to try Uncle Arnie’s, the company is offering a 25% discount to anyone reading this post who buys during the next week. Here is the link:
And the discount code is: “Mindset25”