When I first glimpsed at the blurb about Backyard Soda in my weekly equity crowdfunding email from Republic, I wasn’t feeling the love. However, a closer look at its campaign page suggests someone who loves craft cocktails (that’s me) and is into cannabidiol, or CBD for short (I’m still learning), might want to invest in Backyard Soda.
Here’s my two cents on Backyard Soda the business, and Backyard Soda the investment.
Backyard Soda Loves Bartenders
That’s not my observation; it’s the business’s reason for being. Right on its homepage, Backyard challenges Denver bartenders to use their simple syrups and CBD sodas to create mocktails and cocktails customers would love. Backyard will contribute $5 for every entry to the Colorado Bartenders Guild’s Family Meal Program.
Not only is the company creating products that the bartender in you will love, but it’s doing what it can to support those in need in the Denver-area where it’s based. I can always get behind businesses that have a soul and aren’t just about making money.
As for the products, Backyard sells three main lines: CBD Simple Syrups, CBD-free Simple Syrups, and CBD Sodas.
If you’re not familiar with simple syrup, it’s water and sugar mixed under a boil. As Liquor.com states, “If you can boil water, you can make simple syrup.” My wife, a frustrated bartender wanna-be, makes it all the time for her cocktail concoctions.
If you’re lazy as sin, as I tend to be when it comes to mixing drinks, Backyard puts your production line for craft cocktails one step ahead, while also providing some cool flavors: Madagascar Vanilla Bean, True Grenadine, Lavender Lemon, Ginger Lime, and Mango Jalapeno.
I’m a huge grenadine fan — did you know that grenadine comes from pomegranate? — so I’d be all over that bad boy. Backyard’s got a bunch of drink recipes on its site. I’m preferential to the Bourbon Daisy because it has bourbon (yummy), some of its True Grenadine simple syrup, fresh lemon juice, and Chartreuse.
The CBD line has four flavors. All four contain 15 milligrams of full-spectrum CBD. The CBD is non-psychoactive, so you won’t get high. The qualities of CBD include reducing anxiety and pain, but it varies from person to person.
As for its CBD sodas, it has three regular flavors: Lavender Lemon, Ginger Lime, and Mango Jalapeno. It also has a seasonal flavor, 7-Spice Root Beer. These also contain 15 mg of full-spectrum CBD.
I’m thirsty already. And, I have to say, Backyard’s packaging and design are very attractive. It’s clearly spent time on its overall image.
Why Invest in Backyard Soda?
CBD sodas are an excellent fit for equity crowdfunding because if you already support the company by buying their products, a $100 minimum investment is not going to break the bank for people working full-time and generating disposable income.
This morning I was writing about Virgin Galactic (NYSE:SPCE), a company that’s looking to commercialize space flight. For most people, that’s a much different investment because it’s hard to evaluate whether it will be successful or not except, maybe, for an astronaut.
That doesn’t mean you should be willy nilly in your due diligence on Backyard, but if you like the product, and you think it’s got a chance to grow, a small bet on its future isn’t going to keep you up at night.
To date, Backyard has raised $106,516 from 248 investors, an average of $438 per investor. The company’s goal was to raise at least $25,000 and a maximum of $350,000. It’s raised approximately 1,121 per day in the first 95 days of its campaign. With 40 days left in its campaign as I write this on Aug. 21, it’s unlikely to raise the maximum but could get to $150,000, or six times its minimum goal.
So far, Backyard Soda is available in more than 80 stores in Colorado with plans to reach 300 stores by the end of the year. In addition to buying the products on its website, you can buy at certain Whole Foods stores and on Amazon (NASDAQ:AMZN).
The company plans to use the proceeds from its Republic page to invest in sales development, marketing to support sales, and building production capacity to meet future demand.
Like many new businesses, Backyard has limited sales and is losing money — $145,658 in 2019 and $63,897 in 2018 — so you should not count on the funds you invest in the company.
Recently recommended as one of 10 canned or bottled beverages to try this summer, if you live in Colorado or a nearby state, you ought to track some Backyard Soda down and give it a try.
If you like the taste and have some investable cash, an investment in the company might not be a bad idea. But do your research.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
