Cirona Labs Raises $1.5M Seed Round Backed by LiDestri, BevSource

Cirona Labs, a cannabinoid manufacturer and supplier for food and beverage brands, announced today that it has raised $1.5 million in an oversubscribed seed round, led by LiDestri Food & Drink, BevSource and Sweetener Supply.

What is Cirona Labs?

Located on Cornell University’s Tech Farm Innovation Center in Geneva, New York, Cirona Labs officially went to market earlier this year as a provider of CBD for several beverage brands including mocktail brand Little Saints.

The company was founded in 2018 by CEO Hunter Friedland while he was a senior at Cornell. In 2020, Friendland brought on three co-founders with extensive backgrounds in the food, beverage and cannabis industries, including chief science officer Nick Jackowetz, a former Canopy Growth formulation advisor; chief innovation officer LJ Buffardi, a 26-year veteran of Ferrara Candy Company where he worked in both sales and procurement; and COO Alan Davis, who previously served as VP of business development, sales operations, sales and product management at LiDestri.

According to Jackowetz, Cirona aims to provide high-quality and specialized cannabinoid emulsions and works with brand partners to maximize flavor, functionality and absorption. The company offers complete customization for each product it works on, which Jackowetz said differentiates Cirona from competitors who only provide a limited “one size fits all” selection of ingredients.

“A lot of competitors in this space will have a few offerings, you know, maybe between four and a dozen, whereas we literally have hundreds [of emulsions] and growing every day,” Jackowetz said. “I think it’s really important that we look across many types of ingredients to find the exact one that works well for the customer and then test it to make sure there’s compatibility.”

Friedland said that although Cirona is currently only licensed to work with CBD, the recent legalization of recreational cannabis in New York could open the door to developing THC products in the future.

What do these investors bring to the table?

In attracting LiDestri, BevSource and Sweetener Supply, Cirona has compiled a roster of major food and beverage industry ingredient suppliers that provides them with a large network to tap into. As well, the investment gives these companies a stake in the hemp and cannabis category.

According to Friedland, LiDestri president John LiDestri is an advisor to Cirona and has helped to refine and guide the company’s business plan. He noted that LiDestri, one of the largest co-packers and private label manufacturers in New York, has monitored the cannabis market since medical marijuana was legalized in New York in 2014 but its investment in Cirona marks a move into hemp and cannabis food and beverage that bets big on the category continuing to grow.

The CBD beverage category has been limited by the lack of federal regulation and the longer-than-anticipated delay in guidance has now led many brands in the category to launch non-infused product lines in order to remain competitive. But Friedland believes that once the industry is able to move forward, Cirona and LiDestri will be well-positioned to rapidly grow their stake in the space.

“They saw a lot of synergies, particularly as the industry starts to get to the next step,” Friendland said. “LiDestri has pretty large minimums, so in terms of the larger startups and CBD beverage brands, or some of the major CPGs that will ultimately enter the space, they’ll get to those capacities soon. So LiDestri wanted to make this partnership and investment early to really learn the industry and see where they can play as this evolves to the next step.”

Friedland noted the relationship with Sweetener Supply was similar and that the company’s large customer network will open doors for Cirona in the confectionary space.

“The increased interest in sustainable cannabinoid use in food manufacturing is clearly evident in the current marketplace,” said Joe Gardella of Sweetener Supply in a press release. “Supporting Cirona Labs in this round of funding was an easy decision for Sweetener Supply as they have clearly shown their product solutions are the best available for any company looking for innovation with natural ingredients.”