Khiron and Dixie brands announce joint-venture to boost cosmeceutical sales in Latin America

Companies are infusing CBD and THC into thousands of products, which have hit the shelves in the United States, Canada, and Latin America.

On March 14, two of the largest cosmeceutical brands announced a joint-venture, in the US, Dixie Brands (CSE:DIXI.U), (Frankfurt:0QV), (OTC:DXBRF), based in Colorado, and Khiron Life Sciences Corp. (TSXV:KHRN), (OTCQB:KHRNF), (Frankfurt:A2JMZC), a Canadian company dominating the Latin American market.

This project is to bring more than 100 products to Latin America.

 

Capitalizing on cosmetics

CBD cosmetics are moving quickly into the cannabis market at large. NY Magazine, Allure, and Ulta touting CBD products.

For Khiron, Kuida, the company’s CBD infused skincare brand, initially launched in Colombia but has since received approval in Peru and Mexico.

Chris Naprawa, President of Khiron, told James West of Midas Letter, “Many of our competitors are very much focused on low-cost cultivation for export into foreign markets, whatever they may be . . . Kuida sales started in November; they are growing . . . [There are] about 54 or 56 stores in Colombia . . . getting into 2,000 or 3,000 doors over the next year or so would be, I think, a goal that we would strive for.”

Naprawa continued to say, “in Bologna, Italy, is the largest cosmetic show in the world, called Cosmoprof; we’re the only company of our type that is there.”

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When asked about the new joint-venture, Naprawa indicated that Dixie, based in Colorado, is a perfect partner to expand this sector of Khiron’s business, which spans 6 Latin American countries.

Dixie built their name and reputation in the United States with over a hundred THC and CBD infused products designed for internal and topical use for humans and pets.

Dixie’s approach, to provide “accurate dosing” to develop “safe, effective, and delicious cannabis products” is a big part of their success. A scientific, research-based approach aligns closely with the market in Latin America which is almost exclusively a medical market.

Success has allowed the company to break into new U.S. markets, specifically Michigan announced this year, as they attempt to double their manufacturing and distribution footprint in 2019.

The deal

On March 14, 2019, Dixie and Khiron executed a joint-venture called Dixie Khiron JV Corp, which they announced in January. The joint-venture is 50 percent owned by each firm, denoting the significance of what each company has to offer.

Dixie is bringing more than 100 market-approved products to Khiron’s global reach. Dixie’s products span more than 15 categories and are available for purchase at approximately 1,000 dispensaries across the United States.

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Khiron, which already has boots on the ground in six countries, is a perfect launching pad for Dixie’s products to go global.

In Dixie’s press release on the topic, its President and CEO, Chuck Smith, expressed his excitement for the deal. “In the weeks since we announced this partnership, it has become even more clear that the strengths of our two companies are perfectly aligned to lead in Latin America . . . We are completing . . . plans to secure ‘first mover’ advantage . . . to introduce products to selected markets.

The agreement also states that Dixie will take over Kuida manufacturing and distribution in the United States. The companies hope the products will have broad appeal in the US market.

Stock outlook

These announcements, while potentially promising for stockholders, haven’t had a promising effect on the companies’ stocks.

At market close on Tuesday, Dixie and Khiron’s stocks were down approximately 3 percent on the OTC Market, closing at .88 per share and 2.93 per share respectively.

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