Cann, makers of cannabis-infused social tonic, has raised $5m in a seed funding round to support its business expansion plans within California, as well as to other states in the US.

The funding round was co-led by Imaginary, a New York-based venture capital firm and private growth capital fund JM10 Partners.

In addition to expanding its presence to new legal state markets, Cann will use the funding to expand its production capacity.

The company adds that the proceeds will also go towards expanding its product portfolio by fast-tracking product development.

Cann co-founder Luke Anderson said: “With sophisticated flavour profiles, premium all-natural ingredients, and micro-dose of THC, Cann is uniquely designed to be approachable even for someone who has never previously considered cannabis as a part of their social lives and appealing to that consumer is what it takes for a product to break the ‘stoner’ stigma and cross over into the mainstream.”

This is the first investment in a cannabis-focused company by Imaginary, while JM10 Partners is expanding its cannabis portfolio.

Other investors joining the funding round include Navy Capital, Global Founders Capital, Cresco Capital, as well as other strategic investors including Brian Spaly of Bonobos and Trunk Club.

Cann notes that its drink contains 2mg of Tetrahydrocannabinol (THC) and 4mg of Cannabidiol (CBD).

Imaginary co-founder Natalie Massenet said: “We have been tracking the new generation of consumers who are searching for and embracing new forms of responsible social drinking which do not involve alcohol.

“Cann, with its formulation that has the potency of a light beer without the alcohol or calories, addresses this growing trend in a brilliantly formulated series of beverages.

“Being obsessed with backing the best new disruptive consumer product companies, Imaginary also loves the fantastic branding and positioning of Cann.”