Channel 4 to bring cannabis brand Cannaray to TV
Channel 4 has invested a portion of £10m via its private equity division into cannabis-based startup Cannaray.
This marks another addition to C4 Ventures’ wellness investments
C4 Ventures is the largest media-for-equity fund in the UK. Launched in 2017, it sees the broadcaster exchange advertising inventory on Channel 4 platforms for equity in startups.
Cannaray is a European medical cannabis and retail CBD company. It has also received backing from Three Bridges Private Capital and Alpha Blue Ocean.
The investment by C4 Ventures will give Cannaray’s flagship wellness CBD brand access to a “high-reach upmarket TV audience” in the UK. It comes at a time of rapidly-growing consumer interest in CBD, with online sales of CBD in the UK doubling in 2021 compared to the previous year.
Vinay Solanki, head of C4 Ventures, said: “We’ve been impressed with the leadership team at Cannaray and their progress in building a portfolio spanning European Medical Cannabis and the Cannaray CBD wellness brand.
“This investment fits well with our strategy to back bold categories as part of our Future4 strategy to diversify new revenue streams. We’re looking forward to supporting Cannaray’s CBD wellness brand campaign across our marketing platform and hope it drives the significant brand awareness only possible through the scale and reach of TV advertising.”
The European cannabis market is expected to grow from €403m in 2021 to reach €3.2bn by 2025. Due to the claimed medical benefits of CBD, the Advertising Standards Authority maintains that any ads that present CBD products as medicines or as having a medicinal effect require those products to be licensed as medicines.
As a result much of the current advertising around CBD focuses on less tangible benefits related to wellbeing.
Last summer Cannaray became the UK’s first major brand to advertise CBD on TV. The campaign features Cannaray’s brand ambassador and TV presenter Claudia Winkleman advertising the potential benefits of CBD.
Cannaray CBD is stocked on Amazon and in over 1500 retail outlets across the UK including Tesco, Superdrug, Asda, Waitrose and Harrods.
According to research from the Association for the Cannabinoid Industry (ACI) and Centre for Medicinal Cannabis (CMC), the interest in CBD soared over lockdown, and was forecast to generate £690m in annual sales for the full year 2021.
Scott Maguire, Cannaray chief executive, said: “I am delighted with the high participation of both existing and new investors within this funding round and thank them for putting their money and faith in us.
“The Channel 4 Ventures backing is one of the first of its kind in the European cannabis sector, and a sign of the credibility and growth opportunity available within the market. Having created one of the leading CBD brands in the UK, we are now focused on building Europe’s leading medical cannabis company and improving the lives of millions of people.”
Channel 4 Ventures has previously backed wellness brands including Maxwellia and Vitl, in addition to a number of other speculative and fast-growing brands including those in the meatless meat and crowdfunding sectors.
The news comes on the same day that the UK government announced that the privatization of Channel 4 was set to go ahead, on the contentious grounds that the channel cannot compete in the age of streaming services.