As cannabis markets continue to diversify, the first major multi-state brands have already found their places in the record books. One of the of the brands clearly associated with this exclusive club was Dixie Elixirs, a mainstay product in a Colorado edible market that saw the sale of almost 5 million products in 2014 alone.
Cannabis Now: Dixie Elixirs was very exclusively a Colorado brand up until last year. How have these expansion efforts gone over the past 12 months?
Keber: The last 12 months, specifically July of 2015, we left the state confines of the borders of Colorado and embarked on an incredibly exciting and challenging journey. Alongside our partners at Indus Holdings, we established a presence in Northern California’s Monterey region. That facility and product line launched there that July. I believe we’re in roughly a little over 400 dispensaries in California now. In addition to that we launched our other wellness lines Therabis for pets and Aceso for humans, which is derived from industrial hemp.
Where do you get the hemp?
We’re sourcing it through a couple of our supply chain management vendors, most of it is sourced outside the U.S. Although more and more industrial hemp is coming online here in Colorado. Last year there were very small lots of it, and the year prior in 2014 it was only available for research and development. Now you’re seeing massive facilities primarily in the southern part of the state becoming operational. They’ll probably be able to serve customers like ourselves probably as early as later this year. That is really exciting because we’ll be able to incorporate that cannabidiol (CBD) as part of our metrics system, or marijuana inventory tracking system here in Colorado. We’ll be able to sell it not only for medical purposes but to the adult-use consumer.
What caught you off guard the most in the general expansion efforts?
The California market is arguably 50 percent of the revenue associated with the industry domestically. It is a big fractured market. There is little to no compliance in much of the state and no real playbook to go by. Oakland, Berkeley and San Francisco, three cities that literally connect to each other, all have different packaging and labeling rules. That has been the biggest challenge, trying to embrace that constant change. That’s really taxed the management team, but at the end of the day, we are committed to safe packaging that is child-resistant, resealable, accurately labeled and lastly responsible dosing.
No offense to the manufacturer in California, but there were little to no rules to go by until recently. That allows anybody with a spoon, a cellophane baggie, and a dot matrix printer to have an infused products company. Bringing these labeling systems and dosing formats to California has been disruptive in my opinion and it wasn’t an immediate adoption. There was a tremendous amount of consumer education, by that of the medical marijuana patient, but also that of the business owner to understand why the product is more expensive, and why we have all this fancy packaging. That was probably the greatest lesson learned.
Where do you plan on taking the experiences learned from that process next?
We’re taking what we learned in the California market and paying it forward in Arizona, in Nevada, in Oregon and Washington. These are all four markets that will likely come online before the end of the summer. In Arizona and Nevada’s case, you’re probably talking the end of the month. We’ve been working diligently on those facilities for over a year now, and are really excited for what that means for us. Obviously, those markets today are medical, and serving the medical community, but will likely convert to adult use this November.
You guys must be pretty excited for November in general.
Absolutely, at the end of the November elections, we anticipate California, Arizona and Nevada converting to adult use to compliment those states who’ve already made the transition. We’re very well positioned to be serving a significant portion of the adult-use market.
You guys are a brand that got your start working exclusively with patients, where have you found the balance point in providing for the adult-use market and the needs of patients?
I’ll be honest with you, and I admit it almost sheepishly Jimi, our roots are founded specifically in serving the Colorado community of medical cannabis patients. Then comes along Jan. 1, 2014 and the demand for adult-use products, particularly on the infused side, was beyond what anyone could have imagined. When it comes to the adult-use consumer, and particularly the cannabis tourist, they’re people that are flooding into the mountain towns. They just have a voracious appetite. No offense to the person who cultivates high-grade cannabis, but it’s basically available on every street corner in America.
When folks walk into the store and see a properly displayed 100-milligram Elixir or THC Awakening Mints, these are really high-end packaged consumer goods platforms. Literally, they will buy everything they can get their hands on. We ultimately, and again I admit this sheepishly, got away from the medical cannabis patient. For the last four months, we’ve been revamping our product line to deliver a very robust strong THC intense product. We have no less than nine heavy THC products going online in the next 30 days alone to serve medical patients, not only here in Colorado where you’re talking about $400 million dollars of over a billion dollar industry, but in these other markets that are truly focused on only serving the medical community.
I think ultimately getting away from that was a mistake on our part. I admit that we got away from our core consumer that had really supported us and focused on adult use, so we’re going back to our roots and launching new campaigns. We’re working very aggressively with our retail partners to make sure the medical cannabis patients in the state of Colorado understand we value and appreciate their business. We’ll start to see that with some of the new lines coming out, again, designed specifically for patients. Ultimately the full revamping will take place no later than Oct. 1, we’re way ahead of the deadlines we have to meet on that.
What are the products? What should folks be keeping an eye out for?
We have a lot of products in the data phase, we need to perfect the new products before distributing them to wider markets. We’re a big ship so we need to leave enough room for course correction. The 200-milligram elixirs are coming out, in California, we have the 500-milligram bath soak on the way.
Which edibles do you enjoy? Let us know in the comments below.