Marijuana Drinkables: Inside Dixie Elixirs' Race to 4/20

Marijuana Drinkables: Inside Dixie Elixirs' Race to 4/20
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It’s a warm April morning less than two weeks before 4/20, and Dixie Elixirs executive Joe Hodas is cheerfully showing off the company’s new products — wildberry lemonade and peach tea — and a childproof bottling system that will ensure that Dixie’s most popular products are on the shelves for the big day.

Like elves scrambling to get ready for Christmas, the Dixie team is hurrying to the holiday finish line. For the past five days, a handful of workers have been cranking out roughly 3,000 bottles of pot-infused soft drinks a day — while an automatic bottling system sits unused just thirty feet away.

“We’ve had to deal with stress from the top on down, but contingency plans are critical,” Hodas says. “Now we’re at the point where it’s turned into a galvanizing effort for everyone.”

Tenacity and teamwork are essential in an industry constantly under fire.

After adult-use dispensaries opened for business in January 2014, and in the wake of a few spectacular stories, edibles quickly vaulted to the top of the Colorado Legislature’s most-unwanted list. In March 2014, nineteen-year-old college student Levi Thamba died after he jumped from his hotel-room balcony; the Denver coroner’s office listed marijuana intoxication — he’d eaten a cookie — as a contributing factor. A month later, 44-year-old Kristine Kirk was murdered by her husband after he allegedly consumed painkillers and marijuana candy. A few months after that, New York Times columnist Maureen Dowd melted down after consuming an entire marijuana candy bar rather than the recommended dosage; she advised that a skull and crossbones be put on every edibles package.

Marijuana Drinkables: Inside Dixie Elixirs' Race to 4/20
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But despite the bad press edibles has attracted, about five million of the items were sold in Colorado last year; it’s the fastest-growing segment of the market. And in February, the state legislature approved a proposal to change packaging requirements for all edibles. Under these new regulations, all retail edibles must now be sold in childproof containers, with each 10-milligram THC serving individually marked.

New regulations require fast reaction — but that’s been a Dixie Elixirs hallmark from the start. Entrepreneur Tripp Keber realized that marijuana was here to stay back in 2010, when he watched an off-duty police officer sit idly by while a few partiers smoked weed outside a club one night; he founded the company soon after. Today, it features seven pot-infused product lines, including edibles, drinks, topicals, pills and more.

Complying with those new packaging rules, while expensive, was relatively simple for such edibles as pot-infused chocolate bars or mints. Like Hershey squares, candy bars are now stamped out into individual servings, and the bars can be childproofed with zip-lock bags or plastic hooks and cardboard. (Hodas demonstrates this with Dixie’s new Toasted Rooster chocolate bar, which requires several minutes to unwrap.) Dixie’s five-milligram mints are now individually wrapped in foil, making it quite easy for consumers to monitor how much THC they’re ingesting.

But making drinks compliant was much trickier. The original elixirs were packaged in 8.5-ounce aluminum bottles, and the company couldn’t just mark off individual serving sizes on the outside: It would be too easy for customers to guzzle 50 milligrams of THC before realizing it. “We needed a sealable device that delivered a single dose and withheld carbonation,” Hodas explains. “After weeks of trying, it became evident that those didn’t exist, so we had to change to plastic.”

Joe Hodas compares the old and new Dixie Elixirs drink packaging.EXPAND
Joe Hodas compares the old and new Dixie Elixirs drink packaging.

In a process reminiscent of an eighth-grade science experiment, Dixie employees brainstormed the possibilities. After settling on a design similar to a mouthwash bottle with a push-in screw top that doubled as a 15-milliliter shot glass that would hold 3.5 milligrams of THC, they took 100 models and filled them with liquid, then shook them and dropped them in different places and fashions. The design held, so Dixie sent a prototype to a manufacturer in Canada, with orders to send 15,000 back a couple of weeks before 4/20. Then the nail-biting began.

“We were ready to send some marketing guys up to Canada and freight back the bottles ourselves,” Hodas recalls. “Luckily, it didn’t come to that.”

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After some stressful delays, the new bottles finally arrived in Denver — and then the staff really got to work. “Our bottling machine doesn’t work in conjunction with our new packaging, so we’re doing it by hand for now,” Hodas says. “It’s not cheap, and our production team hates it, but that’s where about 40 percent of our revenue comes from.”

That made the company’s $300,000 investment in the new bottles critical — and smart.

But while the future looks bright inside the offices of Dixie Elixirs, it’s also far from certain — thanks to more tinkering from the state legislature. Under another regulatory change, every edible will have to be marked with an identifiable symbol, liquids included, as of January 1, 2016. Unless you’re making chia seed kombucha, compliance won’t be easy — so Dixie officials are hoping to find an acceptable compromise, Hodas says.

Unexpected shifts in the industry will continue to weed out the unprepared. But as the appearance of Dixie Elixirs drinks on dispensary shelves on April 20 proved, businesses sometimes need to swallow — hard — when profits and market presence are at stake.


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