Dixie Brands has been one of the industry pioneers in establishing a nationally, and some would argue, an internationally recognized brand. There are few processors that have established a multi-state footprint, with both production capabilities and distribution, and even fewer that have the breadth of SKU offerings.
CBE recently caught up with the colorful, but always focused, industry leader and CEO Tripp Keber for an update on where Dixie Brands is today, learn more about what is working, and what is next for the company. Below are excerpts from our conversation.
CBE: Great catching-up with you Tripp, and I still think about your graciousness in allowing me to tour your facility when CBE was still in the incubator.
Tripp Keber: It was an honor to be included on the 2015 Most Important PPR list. It gave Dixie Brands an immense amount of positive exposure to cannabis professionals and others alike. It was an honor to be included amongst so many great cannabis-centric companies, some of which I have known since our inception in 2010. The competitive landscape is evolving rapidly and since Dixie Brands’ launch in June 2014, as well as the successful participation in the adult use market throughout Colorado over the past 34 months, we have been aggressively implementing our corporate expansion plan including California, Arizona and most recently Nevada. We are seeing significant interest amongst these current MED states to transition into an adult use/recreational market. Dixie Brands will be uniquely positioned to transition into these markets as well as several others in 2017 and beyond.
CBE: What have you changed, updated, etc. since we last spoke?
Tripp Keber: Dixie Brands continues to expand its THC and CBD lines of products under various brands including the launch of Aceso and Therabis, our CBD Wellness lines, designed exclusively for both humans and canines respectively. These wellness platforms are designed to deliver CBD whole plant extract derived from industrial hemp, and are distributed across the United States and beyond. Additionally, we have refocused our product innovation to provide unique and innovative delivery systems to serve the medical cannabis community.
Since Dixie’s launch in 2010 in Colorado, we have striven to provide the MED consumer with a unique set of products offering both a varied choice for consumption, as well as delicious flavor profiles without sacrificing quality. These innovative MED products now more recently are packaged, labeled and accurately dosed similar to those nationally recognized REC products that have made Dixie Brands an industry leader.
CBE: What hasn’t worked to your expectations?
As a large-scale manufacturer conducting business in four states (AZ, CA, CO, and NV) with three additional states facilities under construction currently (MD, OR and WA), we are facing a unique set of challenges that typically would not apply to any other industry. The inability to conduct interstate commerce along with the fact that each market has its own set of rules and regulations concerning the manufacturing and distribution of cannabis makes our task incredibly challenging. These circumstances establish an incredibly high barrier to entry and although the management team is slightly “dinged” up from our workload the past 24 months, I am incredibly proud of our results.
CBE: What business activity(ies) has surpassed your expectations?
Tripp Keber: Although there are likely too many items to list that have exceeded my expectations this past year, several come to mind and are at the top of my list. Specifically, the fact that there is an intense curiosity amongst professionals from all sectors of the industry that are interested in and willing to join our “movement”. It is truly validating when you are seeing highly credentialed individuals who are seeking employment within this industry. This coupled with the undeniable fact that hundreds of millions of dollars are pouring into the industry in the form of investment creates the “perfect storm” for an industry that—for all practicable purposes—is still in its nascent stages. With the likelihood that we will see massive (and positive) changes in the upcoming Federal elections next month, I believe we are dangerously close to achieving the “tipping point” (i.e. the Federal Government’s capitulation in allowing for cannabis to be legalized at the national level).
CBE: What sets Dixie apart from other processors in the industry?
Tripp Keber: After watching the evolution of the marketplace including the momentum of the “adult use” (REC) segment, we determined a more suitable and profitable path for the expansion for Dixie Brands was to pivot away from strict licensing deals to focus on establishing joint venture/affiliate partnerships in each market where Dixie could have greater control. Strategically, this positions us to be a “one-stop shop” with deep benefit for any brand looking for immediate access to multi-market penetration. It also provides Dixie with greater flexibility for future expansion and/or consolidation as the regulatory environment inevitably matures and evolves. We believe we are one of the first, if not the only Company that has been able to execute on a plan of this ambitious nature, which we feel will create immense value long-term for the Company and its shareholders.
CBE: Who are some of the best-in-class vendors that Dixie Brands has engaged whose products or services are essential to your Colorado operations?
Tripp Keber: Dixie Brands maintains well over 100 relationships with strategic vendors that serve our various needs across the board. Each one is equally valuable to us and we are grateful for their continued loyalty and support.
CBE: How large is your staff now?
Tripp Keber: At this time Dixie Brands and its related affiliates employee headcount exceeds 100 dedicated and committed men and women spread across four states. It is highly likely we will see a “doubling” in the next 12-18 months. We are incredibly fortunate to have, what I believe to be, one of the most impressive management teams and work forces in the cannabis industry today.
CBE: How many states are you in now and who are your licensees? Any new markets opening up before/by the end of the year?
Tripp Keber: Dixie Brands is currently manufacturing and distributing its THC lines of products in AZ, CA, CO, and NV. We are in the build out stages in three additional markets (MD, OR, and WA) which should come on-line in Q1 2017. We have additional markets identified in 2017 to roll-out both domestically and internationally.
CBE: What do you project for year-end 2016 Revenues?
Tripp Keber: Dixie Brands and its Affiliate Partners are privately held. We do not discuss revenues publicly.
CBE: Has Dixie diversified its revenue streams or streamlined operations and efficiency in light of market dynamics and pricing?
Tripp Keber: Dixie Brands continues to evaluate the marketplace as we see a significant increase in competition among infused products manufacturers; moreover, the arrival of dozens of nationally recognized brands—including brands associated with celebrities. The fact that more and more cannabis consumers are abandoning the traditional forms of smoking flower and embracing safer and more socially acceptable delivery methods is validation of Dixie Brands’ business model.
With our corporate owned manufacturing and distribution model that we will continue to grow domestically and internationally, coupled with the fact that we are well over 100 individual SKUs across 16 product lines representing six brands, makes Dixie the “de-facto” partner to consider when entering the market. As raw plant material (i.e. cannabis) continues to be commoditized in some of the more mature markets lowering overall “cost of goods sold” (COGS) while concurrently consumer adoption grows and margins continue to improve, this positions our business very nicely and in my opinion in the “sweetest spot” the cannabis industry has to offer.
CBE: What is next for Dixie Elixirs?
Tripp Keber: Can you keep a secret?…So can I… 😉 In all seriousness, I hope that your readers will consider joining us at the Marijuana Business Daily Annual Convention in Las Vegas Nevada next month. Dixie Brands will be prominently displayed at the conference and we would be happy to share our long-term vision for the company!
CBE: We surely will Tripp and we wish Dixie Brands the best!
Company Name: Dixie Brands, Inc
Year Founded: 2010
Ownership structure/operating entities: Corporation with JV Affiliate Partners in each state
Owner/CEO E-mail address/Contact Information: Tripp Keber, President and CEO, [email protected]
Management Team: Tripp Keber, Pres and CEO, Chuck Smith, COO and Interim CFO, Joe Hodas, CMO
Headquarters: Denver, CO
Industry Segment/Category: Manufacturing / Processing / Distribution
Current Markets/States Served: 2016 – CO, CA, AZ & NV (active) WA, OR & MD under construction (4Q, ’16)
Current Number of employees: approx. 100
Market Strategy/Goal: Corp owned National / International Manufacturing and Distribution facilities and agreements focused on THC and CBD product lines and brands
2015 Revenues: N/A
2016 Projected Revenues N/A
Expansion Plans: Domestic – IL, MA, FL, PA & OH
Financing strategy: Equity Ownership / PPM / Convertible Debt