building the first true cannabis cpg platform...product renovation and new product development. 5...
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CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
BUILDING THE LEADINGCPG PLATFORMIN CANNABIS
DIXIE BRANDS INC.CANNABIS CAPITAL CONFERENCE PRESENTATION
APRIL 17 & 18, 2019
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Forward-Looking Information
Certain statements in this presentation may constitute "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Dixie Brands Inc. (“Dixie” or the “Company”) and its subsidiary entities or the industry in which they operate, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this presentation, such statements use words such as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this presentation. These forward-looking statements involve a number of risks and uncertainties.
These risk factors are discussed in detail under the heading "Risk Factors" in the listing statement filed on SEDAR. New risk factors may arise from time to time and it is not possible for management of the Company to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance or achievements of the Company to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
The forward-looking statements contained herein are based on certain key expectations and assumptions, including that: (i) there will be no material adverse competitive or technological change in condition of the Company’s business; (ii) there will be a demand for the Company’s products that the Company has accurately forecast; and (iii) there will be no material adverse change in the Company’s operations, business or in any governmental regulation affecting the Company or its suppliers.
Although the forward-looking statements contained in this presentation are based upon what management believes to be reasonable assumptions, Dixie cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this presentation. The Company undertakes no obligation to update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise, other than as required under applicable securities legislation.
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CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Introducing Dixie Brands
• A leader in the cannabis industry since 2010.
• One of the industry’s most recognized
consumer brands.
• More than 100 SKUs across 15 product
categories – both THC and CBD.
• Proven track record of developing,
manufacturing and commercializing products.
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CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Multi-state operator (MSO) focused on high-return segments of the value chain
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Cultivation
Extraction
Product Development
Manufacturing
Branding
Distribution
Retail
Capital-intensive, prone to commoditization
Years of R&D, proven formulations
GMP level capability, proven SOP’s, consistent delivery
Reputation, marketing campaigns, in-depth market knowledge
People on the ground, relationships with retailers, broad product portfolio
Costly to build out a meaningful presence across all urban markets
DIX
IE’S
FO
CU
S
Proven extraction expertise
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Dixie Brands by the Numbers
5
years in business established Companies CPG company
9 3 1
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
9 Years in Business
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• Established. Known. Trusted.
• Unparalleled heritage.
• Industry leading R&D capability & formulations.
• Experts in commercial food grade manufacturing.
• Deep packaging & compliance expertise.
• Extensive Intellectual Property portfolio.
• Market expansion experience.
• Deeply rooted relationships – retail, vendors, producers,
suppliers & industry.
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Dixie’s goal is to be the #1 CPG company in the cannabis industry
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CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Utilizing Deep Experience to Optimize Profit Pools
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Fu
nctio
na
l
Fu
n
Health & Wellness
WorshippersExperience
Explorers
CBD (Hemp) THCCBD (Marijuana)
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Clear strategy for industry leadershipTo control manufacturing and distribution in all of the markets we participate in, simultaneously building a global house of brands known for its quality and efficacy.
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The roadmap to DIXIE Brands becoming the largest CPG manufacturer in the industry:
Global Domination!
Expand into
new markets.
2019: 10+ states plus
Canada & LatAm
1 2Control Production!
Build manufacturing
operations in each market,
using deep experience to
accelerate supply
effectively & efficiently.
3Be Masters of Our Destiny!
Maximize control over route
to market, sales & marketing
efforts in each market.
4Satisfy Consumer Needs!
Use evolving, localized
consumer insight to drive
product renovation and new
product development.
5Leverage for Growth!
Utilize tried & tested
infrastructure to drive
revenue growth both
organically and via
focused M&A.
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Control field marketing and sales – become a valued resource for retailers
Currently selling in > 700 storesTargeting 1000+ stores by Q4 2019CO, NV, MD: 80-95%CA: recently relaunched, expecting >50% within 12 months
Selling into majority of states
DTC / ONLINE
▪ Direct to consumersthrough our owned e-commerce channel
BRICK & MORTAR
▪ Access to >5,000 retail locations by Q4 2019
▪ Indirect via distribution and manufacturers rep groups
In the US…
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Entered in 2019
Entered in 2018 or earlier
Additional target states
MICHIGAN• Newest market opened• 300,000 medical patients
!
THC
CBD
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Internationally…
• Licensing agreement with Auxly Cannabis for manufacturing and distribution
• Well-positioned to succeed within evolving regulatory framework
• Broad IP portfolio gives Dixie first-mover advantages on virtually any products approved for sale
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CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Internationally…
RAPIDLY GROWING MARKET AS CANNABIS IS LEGALIZED ACROSS THE REGION
• Estimated spending of $12 Billion by 2028 (Prohibition Partners)
• 68 million medical patients could benefit (Quintiles MIS)
• Six megacities of >10 million
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Khiron entered market.
Medical cannabis regulation proposed.
Khiron positioning for licenses
Entering subject to completion of
NettaGro acquisition.
of total population of
430M620 million
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Dixie to distribute Khiron’s Kuida®
cosmeceuticals in U.S. market; expected to
have particular appeal to Hispanic-American
population of 60 million
LATIN AMERICAN EXPANSION: 50/50 JOINT VENTURE WITH KHIRON LIFE SCIENCES
COMBINES THE COMPLEMENTARY STRENGTHS OF BOTH COMPANIES
• Dixie: IP portfolio of >100 products, manufacturing processes, SOPs, product innovation
• Khiron: Licenses, distribution footprint, regulatory expertise, local relationships
• Companies to collaborate on new brands and products
DIXIE-KHIRON AIMING TO CAPTURE FIRST-MOVER ADVANTAGE
• Potential to establish a dominant position as fewer competitors are currently targeting the region
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CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Diverse
‘needs based’
portfolio
Robust
Innovation
Pipeline
Clearly
Defined
Brands
Streamlined
Route to
Market
Building a True House of Brands
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Integrated
Comms
Plans
Brand Health
Measurement
CONSUMER PACKAGED GOODS PLATFORM
Deep
Consumer
Understanding
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Executive Team
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CPG industry veterans with experience in wine & spirits, energy drinks, pet food, retail, finance & banking
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Financial position: FULLY-FUNDED BUSINESS PLAN
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All figures in U.S. dollars
Raised $25 million in oversubscribed Series C financing closed October 1, 2018▪ Use of proceeds: $18 million to fund expansion strategy
▪ Debt-free
Public listing to fund opportunistic corporate development activities through RTO on November 29, 2018
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
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STRONG REVENUE AND EBITDA GROWTH PROSPECTS
2018
Revenue outlook
$7-9M
$65-75M
4 states
Licensing revenue model
New law to allow ownership
of OpCo: recognize wholesale revenue
Re-entered market Q4 2018;
full year of sales
Continue growth in NV, MD.
Enter 4-6 new states in 2019
(MI, …)
Expand distribution +
portfolio expansion via new products
2019
Revenue outlook
Colorado
California
All other
states
Aceso,
Therabis
EBITDA: ~10-15%
*
* Aggregated revenue across all markets and activities
$140-160M
2020
Revenue outlook
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Investment Highlights
• Broadest portfolio of revenue-producing products in the industry.
• Extensive Intellectual Property relating to formulations,
technology, manufacturing, packaging and regulatory compliance.
• Proven ability to expand and deploy quickly in new markets.
• Established distribution channels with proven sales, consumer
and field marketing capability.
• Fully funded business plan with strong balance sheet.
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CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
Dixie Brands by the Numbers
22
years in business established Companies CPG company
9 3 1
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
BUILDING THE LEADINGCPG PLATFORMIN CANNABIS
DIXIE BRANDS INC.CANNABIS CAPITAL CONFERENCE PRESENTATION
APRIL 17 & 18, 2019
Contact Information
303-945-3965
4990 Oakland St.
Denver, Colorado 80239
www.dixiebrands.com
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF
CSE: DIXI.U | Frankfurt: 0QV | OTC:DXBRF 24
Subordinate Voting Shares– 124.8 million shares issued and outstanding
– 16.5 million options, average price C$0.66; 35.2 million warrants, average C$1.46
– Fully diluted: 176.5 million shares
– Recent trading range: US$0.50 to $1.13
LISTINGS– Canadian Securities Exchange: DIXI.U
– Frankfurt Stock Exchange: 0QV
– OTC listing: application underway
Non-participating Voting Shares– 500,000 NPV shares, 100 votes each, held by
a company controlled by senior management
CAPITALSTRUCTURE