Our largest cannabis beverage investment, Uncle Arnie’s, is wildly outperforming expectations. So much so that we co-led a $7.5 million fundraising round with Delta Emerald to help this rocket ship reach escape velocity.
When we first invested in January 2024, the company had just wrapped up the 2023 calendar year with just $4.5 million in sales. Less than 18 months later, Uncle Arnie’s is now at a $24 million revenue run rate—despite battling inventory shortages because demand is outpacing supply.
Uncle Arnie’s is either #1 or #2 in every market where it fully competes, regardless of when it entered. We believe it is now the top hemp beverage brand in the ultra-competitive Minnesota market, despite being a late entrant.
It’s not just a fun brand with great-tasting drinks. Uncle Arnie’s has nailed a price point that’s resonating with consumers. In the regulated dispensary channel, you can buy a 100mg drink for $7.99. In the hemp retail channel, a 10mg shot goes for $2.99 at your local liquor store—offering real bang for the buck.
This outstanding value, combined with flavor and branding, is driving overwhelming consumer demand. And a flywheel effect is kicking in: as volumes increase, unit-level costs drop thanks to volume discounts and economies of scale. So, while revenue soars, margins start rising too.
What’s even more remarkable? Uncle Arnie’s has achieved all this while spending a fraction of what competitors spend on marketing. And almost all sales are coming through retail, with minimal direct-to-consumer online activity.
For a sense of how valuable the brand has become: a large alcohol distributor in one state recently paid $1.7 million in cash to a smaller distributor to acquire the rights to distribute Uncle Arnie’s in only one state. Based on our estimates, that distributor must believe Uncle Arnie’s will generate $7–10 million in sales in that state alone for that deal to make economic sense.
Leading the charge is one of the most complete management teams in all of cannabis: CEO Theo Terris and President Alberto Esquenazi, supported by Jimmy, Assaf, and the rest of the team. We’ve spent significant time with them in the field meeting retailers, distributors, and suppliers, and came away deeply impressed by their operational excellence.
But Uncle Arnie’s has another secret weapon: Harry Rubin, a co-founder of Boston Beer (NYSE: SAM). Not only has he been an early investor, but he also serves as a special advisor—regularly speaking with the team multiple times a week, sometimes daily. His expertise has been invaluable in shaping strategy and validating just how special this team is. Harry has said he believes this is a once-in-a-generation management team. While we don’t have his decades of beverage experience, we agree they’re extraordinary.
Harry and I have both joined the board as part of this fundraising. I cannot tell you what an honor it has been to learn from Harry during the last 18 months and how grateful I am to be an investor and board member alongside of him.
With this capital raise, we believe Uncle Arnie’s can hit $50 million in sales by 2026—and possibly $100 million by 2027. At that level, we believe the company could be worth 5–10x sales, or potentially $1 billion. For reference, non-alcoholic brand Athletic Brewing raised capital at a 9x sales valuation in 2024.
When we started investing in hemp beverages, we hoped to back at least one breakout company. We believe Uncle Arnie’s is exactly that—an absolute rocket.