Dixie Elixirs CEO Talks About Canadian Expansion

Once Canada began its cannabis legalization efforts, investors' eyes shifted from the fragmented state policies in America to a federal government up north that was open for business. The money soon followed: Reports of massive investments from companies like Molson-Coors and rumors of interest from Coca-Cola continue to swirl around Canada's new legal cannabis sector (legalization will officially begin October 17) — and Colorado brands have taken notice.

Dixie Elixirs is one of a handful prominent cannabis companies based in Colorado that has already began establishing itself in the Canadian market, but Dixie took it a step further last week when the brand announced its intentions to go public in Canada. To learn more about the financial obstacles pot companies face in America, and how they're going north to avoid them, we talked to Dixie CEO Chuck Smith.

How did you start working in legal cannabis?

Nine years ago, my partner and I were looking at some passive investments, and one of the things we invested in was a small local product company. We quickly realized that the company needed significant capital and management support, and so, working with my partner Tripp, we acquired the company. (That company is now Dixie.)

What prompted Dixie's initial move into Canada?

Due to the federal legalization of cannabis in Canada, Dixie has more access and ability to raise capital in that country versus the U.S., where regulations are highly restrictive and impede growth. Dixie is already a global brand, and this move into Canada allows us to expand our footprint in another major market — where, upon regulation approval for infused products — we can introduce the full Dixie portfolio of products to Canadian consumers.

Why go public in Canada instead of the U.S.?

Access to public markets in Canada are more favorable, due to the acceptance and liquidity offered by the public markets with federal legalization. We look forward to the day when the U.S. markets will accept professional cannabis companies as viable, high-growth businesses, so that we can bring the same investment opportunities to U.S. citizens and investors.

How much potential earning power is the U.S. losing to Canada thanks to our differences in federal cannabis policy?

On a macro-level, the U.S. will fall behind Canada if they don’t move quickly toward federal legalization. The industry is evolving at such a fast pace that the U.S. could lose the opportunity to be a leader in innovation, cultivation, technology, research and jobs. On a micro-level, Dixie is spending a large amount of money on Canadian securities lawyers, audit firms — all the things that we need to support our efforts to go public in Canada.  I hear Canada's retail market is much more restricted in regard to edibles. How will Dixie expand its brand under those restrictions? Will the Dixie products be different in Canada from America?

Yes, even upon legalization this month, Canada’s retail market is not yet allowing for infused edibles. Our initial offering will include products that are compliant under current Canadian regulation, such as topicals, tinctures and combustibles. Once infused-edible regulations are approved — which we anticipate will be in mid- to late 2019 — Dixie will introduce our broad line of edibles and drinks to the Canadian consumers.

Does Dixie have any new plans in Colorado you can share?

Through our licensed manufacturing partner, we are currently building out a new innovation and testing lab in Denver, led by our director of science, Jay Dennison. Working from our new lab, a dedicated research and development team will be focusing on developing unique and innovative products and new delivery methods. We are also expanding several of our product lines, including new flavors for our popular, low-dose mints and new tablets with high CBD:THC ratios. In addition, we will debut new delivery methods through our hemp-derived Aceso wellness line of supplements for humans, and a new cat treat through our all-natural pet-supplements line, Therabis.

Dixie became popular thanks to its drinks, but it makes a lot more than that now. What is Dixie's most popular seller nowadays?

While Dixie started with one product — the Dixie Elixir — the company now has more than 100 items for sale ranging in everything from gummies, chocolates, balms, topicals, tinctures, concentrates and more. One of our most popular sellers — and likely due to the growth of baby boomers using cannabis products — is our Synergy line of CBD:THC balms, which are great for those seeking pain relief and anti-inflammation without the psychoactive effects. In addition, our recently introduced low-dose mints have been a popular line and continue to show very rapid growth.