It’s been a very challenging year for markets across the board, and many of the old standbys, like energy and biotech have proven to be unreliable at best, and devastating at worst. In this environment, many will understandably flee the markets altogether. However, the savviest investors will be looking for the biggest and most promising growth plays, and chief among those just might be cannabis.
As an unparalleled legalization fervor sweeps through North America, Dixie Brands is looking to position itself as the go-to company for a broad variety of cannabis-infused products as the budding multi-billion dollar market blossoms. Equities.com recently had the opportunity to speak with Dixie Brands, Inc. CEO Tripp Keber regarding the Company’s wide slate of THC and CBD-based products, as well as Dixie’s ambitious plans to become a global leader in the cannabis space.
Equities:Thanks for speaking with me today, Tripp. So, why don’t you start by giving a little overview of Dixie and what you guys are doing over there?
Tripp Keber: Sure. So, Dixie Brands is an intellectual property company associated with brands serving both the medical marijuana and the adult-use cannabis communities. Dixie is in its sixth year, founded in 2010 here in Denver, Colorado. And for the first four and a half years, we primarily served the state of Colorado, really perfecting our offerings, which were designed to deliver THC-infused products to both medical marijuana patients and adult-use consumers.
In June of 2014, we created Dixie Brands, which is the parent company and owner of all the various brands that we’re not only launching in the state of Colorado, but in five additional markets. In 2015, those markets consisted of Colorado and California. We launched Dixie in California in July of last year. And at the end of 2015, we announced additional markets, including Arizona and Oregon. And in the very near future, we’ll be announcing both Nevada and Washington State, depending on when this article comes out, maybe before or after that.
We humbly believe that all of those will be both medical marijuana and adult-use consumption markets - and certainly California will be in the Glengarry Glen Ross league, if you will. We announced strategic partnership with a partner in Australia, likely serving both Australia and New Zealand as two new countries.
Equities: You see a lot of opportunity in Australia and New Zealand right now?
Tripp Keber: Yeah. Well, specifically in Australia, in Victoria they’re quickly moving to legalize medical marijuana at a national level. And the irony is that we established these relationships more than two years ago, and so if you had looked at the political landscape then, I think most people would have suggested that we were crazy to even contemplate a strategic partnership. But almost two years later to the date, in November of 2015, we announced this during the National Marijuana Business Conference, which was in Las Vegas. It was a really big press conference, and obviously, the timing was perfect.
Initially, we’ll start with a CBD rich cosmeceuticals line carrying the Dixie brand in Australia. And then from there we’ll grow from those products to both THC and CBD-rich products, offering a very distinct product set to our partners in Australia to have a very broad distribution agreement, so we can likely be in hundreds if not thousands of stores before the end of this year. Our product is set for launch in the second half of 2016, specifically in Australia.
Equities: What do you suppose prompted such a rapid change in Australia?
Tripp Keber: Well, the end of marijuana prohibition effectively began on January 1, 2014, here in Colorado, and for the last twenty-five months, all eyes of the world had been on our state. Our own governor here in Colorado was negative, and then neutral at best. He has sheepishly admitted that he may have been wrong in his assumptions that adult-use marijuana was going to be bad for his state and for its constituents. Today, the state is thriving in all categories, including tourism, sales tax revenue, creation of jobs associated with the cannabis industry, and seemingly nothing has gone horribly wrong.
Certainly, there have been a very de minimis number of tragedies, maybe two or three that could loosely be associated. Of course, those should not be minimized, because we have to be very careful how opiates, or alcohol, or even tobacco products are consumed. But all indications suggest that what is taking place here in the United States is working, and now countries like Mexico and Canada are seriously contemplating federal capitulation. Uruguay, of course, has already done so. Many countries in Europe, even Great Britain, are giving serious thought to the issue of legalizing marijuana in some form or fashion. And so while the previous response by many was “Not in my backyard,” that line of thinking has now become “Heck, let’s give this real contemplation.”
And people are realizing there’s additional information that’s made readily available through research, that shows this plant is not a dangerous narcotic. If you look at the Controlled Substance Act here in the United States, it would place cannabis as more dangerous and less valuable from a medical perspective than heroin and/or cocaine. I just know that’s not the case, and so these schedules are certainly antiquated and outdated. So that is, I think, why countries like Australia are giving real contemplation to this.
Equities: Great, I think that does give a great deal of insight. Back to Dixie, though, in this rapidly moving transition toward broadened public acceptance, how would you say Dixie is looking to capitalize on this moment?
Tripp Keber: I would suggest that Dixie Brands is one of the preeminent companies creating innovative delivery systems, offering the patient and/or consumer an infinite number of choices across thirteen or fourteen delivery systems - from drinks to mints to edibles and topicals. And then appealing to the adult-use consumer across a multitude of brands, and so we have the Dixie Elixir brand, and we manufacture and distribute third party brands like Foria and Quigley’s.
Now we have Therabis and Aceso as well, which are two wellness companies, one for pets and one for humans, respectively. And so, now we’re really starting to morph and evolve into what we can call a true consumer packaged goods company focusing on cannabinoids, both THC and CBD. These are products that are available for online sale across all 50 states.
Equities:Can you explain cannabinoids for our readers? What are those, exactly, and what do they do?
Tripp Keber: Sure. There are literally hundreds of cannabinoids that cannabis sativa (aka marijuana) offer to consumers. And I’m not going to make the distinction between that of a patient or an adult-use recreational consumer. But primary the cannabinoids that we have focused on now for years are both THC and CBD.
THC is the cannabinoid that has psychoactive properties, or will traditionally offer some form of euphoria to a patient and/or consumer. Whereas the other cannabinoid, cannabidiol (CBD), has really just been highlighted in only the last three to five years. And so, those two cannabinoids, THC and CBD, are really the foundation of a multitude of products.
Aceso, can literally be distributed internationally through our website, MyAceso.com. Aceso is the Greek goddess of health and wellness, so she’s a badass. And so, through the Aceso brand, which is a human wellness company, we are able to distribute products internationally that are offering the medicinal benefits traditionally found in cannabis. These are actually derived from industrial hemp that is legally imported from Europe. And so, for those individuals, consumers who do not live in states that offer some form of access traditional marijuana, this is a very viable solution.
Aceso is one brand and product set that I think is really going to be disruptive to the industry in a positive way, because THC here in the United States is offered in about twenty-nine states, or about fifty-two to fifty-five percent of the US population. Aceso is something that we can distribute nationally as well as internationally. And so the addressable market is infinitely larger than obviously selling cannabis just here in the state of Colorado.
Tripp Keber: Yes. Therabis is a product that was literally just being launched at the beginning of 2016. The pet supplements business is an approximately $3.2-billion-dollar annual marketplace, and Therabis is one of the first brands to address this sector of the pet industry, delivering the benefits of CBD to your four-legged companions and family members. The initial offering is designed to serve canines.
We have three individual skews. The first of which is the Calm and Quiet. Again, these alleviate the stress and anxiety that pets experience from separation, thunder, et cetera. The second is Up and Moving. Up and Moving is really designed to assist with joint wellness and overall health and wellness for canines. And then the last is Stop the Itch. And that is obviously designed to alleviate skin ailment issues associated with dogs.
So, we have taken these three product sets, Calm and Quiet, Up and Moving, Stop the Itch, which are the three primary issues that owners of pets deal with. They come in small, medium, and large, designed to serve small, medium, and large canines. You can find them in introductory packs of five and then, of course, a monthly supply. And again, these can also can be purchased over the Internet, at http://therabis.com/.
We’re very excited about what those two platforms have to offer. Dr. Stephen Katz, who’s our president, has over thirty years of veterinary medicine experience. He’s been researching CBD in animals for over ten years, and he runs one of the largest pit bull clinics in the country, in Bronx, New York. And so, Dr. Stephen Katz and Dixie Brands have partnered up to create Therabis.
Equities: That’s great. It seems like Dixie is really taking advantage of multiple components of the market in innovative ways. Do you have longer-term goals for the company that you wanted to discuss for the company?
Tripp Keber: Well, the company is obviously focusing on expansion in several categories. Obviously, the physical expansions are presents. This market is very inefficient. There is no interstate commerce, and so we have to build facilities in each of these respective markets to serve both adult-use customers as well as medical marijuana patients. We’re busy building our facilities right now in Arizona, Oregon, Nevada, and Washington State, as well as Australia. And so, that physical expansion will take place as the year progresses. In addition, we’re expanding our brands. And so we’ll be launching additional brands underneath Dixie Brands, which is the parent company.
We’re continuing to identify gaps in the marketplace that are not being served appropriately, and allowing for mainstream consumers or medical marijuana patients to be given access to innovative delivery systems, as well as powerful product sets, continuing to refine our infused products line, which would be edibles, the topicals, and various sublinguals, et cetera.
Also, we have our developing platforms. Concentrates is a very, very active spot in the marketplace. I’m sure you’ve talked to some of our strategic partners, including Golden Leaf Extracts out of Oregon, a publicly traded company.
These strategic partnerships are really going to be accretiveto both companies. Golden Leaf is already a very notable brand in the state of Oregon, so we can take advantage of all of the extraction data that they’ve learned over the last three and a half to four years. And so, really, leveraging our skillsets, again, to bring these innovative methods and brands to the marketplace.
Equities: That’s great. Are there any milestones at Dixie for 2016 that we can look forward to?
Tripp Keber: Well, I think in addition to the six markets and ostensibly three countries that we have announced, you’ll see additional domestic markets coming to fruition. Look at markets like Florida, Maryland, even Massachusetts. The East Coast is rife with opportunity for us. There are additional countries, including Canada and other South American countries that will potentially be targets for us. And then, lastly, acquisition, as we continue to build our war chest. Sometimes it’s much easier to buy a brand, as opposed to building a brand which we have traditionally done in the past.
I think you’re going to see a lot of activity coming out of Dixie Brands in both the physical location expansion as well as the brand expansion. Again, some of that will be done organically versus some of it will also be done just through traditional M&A work. So I think those are three areas to highlight if you’re talking about Dixie’s story.
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