Cannabis beverages are a hot topic in the industry, and a bevy of startups are working on technology to make it easier to infuse chemicals like THC and CBD into drinks.
One of those startups, Trait Biosciences, on Wednesday closed a CA$31 million ($25 million) Series A funding round led by Btomorrow Ventures and Gotham Green Partners, the company told Insider. Btomorrow is the VC arm of British American Tobacco, which invested in a Canadian cannabis producer in March.
Trait has developed a process for making cannabis compounds like CBD water soluble and ensuring that the solution is tasteless, odorless, and can be mass-produced safely and consistently, CEO Peter McDonough said in an interview. The technology allows for a cannabinoid to be infused into beverages and other food products and then absorbed by the body in a predictable way.
"If you look at the early stages of what's been going on in CBD-infused products and THC-infused products, that consistency and that quality assurance is missing," McDonough said.
Trait is starting with CBD
The company is starting with CBD but said its technology can also be used to infuse products with THC, the main psychoactive compound in cannabis. The tech will be ready for use by the second half of next year, McDonough said.
In the cannabis industry, intellectual property is an increasingly valuable asset, industry CEOs have told Insider. Companies are working to create new cannabis plants and methods of growing them as well as new technology for working with cannabis compounds. Other companies working on producing cannabis compounds include Ginkgo Bioworks and Amyris.
While less sexy than consumer brands, these inventions can play a crucial role as companies expand from smaller operators to the global consumer brands many hope to become. 
Companies are adding THC to drinks, but it's a small part of the market
Cannabinoids from companies like Trait could potentially be used in consumer products like Cann, a THC- and CBD-infused beverage startup, as well as in more mainstream brands that could eventually end up on grocery-store shelves.
Cannabis beverages are a tiny but growing part of the overall cannabis market, according to a report from Marijuana Business Daily, a trade publication. Most consumers still purchase dried cannabis flower, otherwise known as plain old weed.
And while CBD products are popular, the industry has become a bit of a Wild West in terms of product consistency and standard doses, as Insider has reported.
From CBD sports drinks to a wide world of cannabinoid-infused products
Consistency is crucial because we're moving into a world where grocery stores will have products like CBD-infused sports drinks on the shelf, McDonough said.
"There's going to be a very large market for CBD-infused beverages," he added.
McDonough said his company is starting with CBD because the compound has a more certain legal status and is already being added to food and drinks. The Food and Drug Administration and other regulatory agencies are ironing out rules that will "create faster growth" for CBD, he said.
Hemp, defined as cannabis with less than 0.3% THC, is federally legal, though the FDA is still working on specific rules that would allow hemp-derived CBD to be used in food products and supplements.
Beyond CBD, McDonough said he sees lots of potential in the market for minor cannabinoids, like CBN or CBG, though more research is needed on their effects. The company plans to develop methods to grow and extract these compounds as well.
In terms of closing the round, McDonough acknowledged the challenges of pitching investors and performing due diligence during a pandemic.
"It was definitely a challenge, but there was this belief that this is powerful science and those two investors stuck with it," he said, referring to Btomorrow Ventures and Gotham Green Partners. "The pandemic taught us a whole new way of life."
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