65.5 F
San Diego
Monday, Mar 18, 2024
-Advertisement-

Company’s Buy Brings Complete Control of a Hemp Business

San Diego-based Medical Marijuana Inc. has acquired a hemp business from one of the biggest names in recreational cannabis, Denver-based Dixie Holdings LLC.

Dixie owns the popular Denver brand Dixie Elixirs & Edibles, a recreational marijuana company that makes marijuana-infused food products such as soda, candy and mints. Dixie’s revenue has tripled over the last few years as the popularity of infused edibles has soared, according to a company news release.

Along with pot edibles, Dixie developed a separate line of natural hemp oil products under the brand Dixie Botanicals. Together with Medical Marijuana Inc. (OTCPK: MJNA), Dixie formed a holding company called Red Dice Holdings in 2012 in which Medical Marijuana Inc. owned 60 percent and Dixie owned 40 percent.

Medical Marijuana Inc. recently completed a deal valued at $6.8 million for the buyout of Dixie’s ownership stake in Red Dice Holdings in order to assume all marketing rights, intellectual property including formulations, products, equipment, manufacturing and customer service operations of Dixie Botanicals to be sold under Medical Marijuana Inc.’s San Diego-based subsidiary, HempMeds.

The acquired brand Dixie Botanicals is in the process of relocating all operations from Denver to San Diego.

Dixie Botanicals’ total revenue from 2013 was $1.55 million, according to Edgar Montero, vice president of HempMeds. Montero expects to drive sales of Dixie Botanicals products to over $2 million by 2015.

Products Not Psychoactive

It’s important to note that not all cannabis products contain the psychoactive and narcotic active ingredient called tetrahydrocannabidinol, aka THC. There are 85 active ingredients in cannabis, and THC is only one of them. Cannabidiol (CBD) accounts for about 40 percent of the plant’s extract and lacks the psychotropic effects of THC.

Under this new deal, Dixie will retain the rights to all its THC-based products as Dixie Elixirs & Edibles — keeping the psychoactive products in states where recreational marijuana is legal. San Diego-based Medical Marijuana Inc. will take over all of the nonpsychoactive CBD-based “Dixie Botanicals” products to be sold by HempMeds.

There are numerous peer-reviewed scientific articles that note the potential therapeutic use of CBD to treat Parkinson’s disease, Alzheimer’s disease, diabetes, rheumatoid arthritis, other inflammatory diseases, nausea and cancer, though Dixie and Medical Marijuana Inc. make no such claims for their products.

Medical Marijuana Inc. currently occupies four buildings in San Diego County, including headquarters in Poway and a 14,000-square-foot warehouse there as well.

Medical Marijuana Inc. currently employs 52 people, but Marcos Agramont, director of operations at HempMeds, said the company plans to hire 100 more by the end of 2015.

• • •

In other cannabis news, San Diego gave final approval in late January to the city’s first legal marijuana dispensary since California voters approved the use of medical marijuana in 1996.

The dispensary will be owned and run by David Blair, a business ethics lecturer at San Diego State University who is HIV-positive and uses medical marijuana daily.

The San Diego City Planning Commission unanimously approved the Otay Mesa-based dispensary after nearly three hours of testimony.

San Diego joins nearly 50 other cities across the state that allow legal medical marijuana dispensaries, but it will be the first city in this county to allow them.

The emergence of legal dispensaries, which must allow their products to be tested, may accelerate the closure of an estimated 100 illegal pot shops.

San Diego’s legalization of marijuana sales follows a nationwide trend, with 23 states allowing the sale of medical marijuana and four others.

A Green Alternative, a consumer cooperative that supports the use of medical marijuana and the dispensary, said the approval was a major milestone.

Opponents of the dispensary said in the city planning meeting that the dispensary near businesses where many children go frequently. They also said it will prompt excessive loitering and smoking of marijuana in the parking lot.

Planning Commissioner Anthony Wagner said the city’s level of regulation was so aggressive that he was highly confident there would be no problems at the dispensary.

The dispensary is expected to open in early March.

Send news to Brittany Meiling at Bmeiling@sdbj.com.

MEDICAL MARIJUANA INC.

COO: Michelle Sides

Revenue: $12.27 million by end of third quarter 2014; $5.06 million in 2013

Net income or loss: ($490,292) by end of third quarter 2014; $24.61 million in 2013*

No. of local employees: 52

Headquarters: Poway

Year founded: 2009

Stock symbol and exchange: MJNA on the Pink Sheets, over-the-counter (OTC) market

Company description: Holding company for a portfolio of cannabis and hemp products and brands

*Includes an “extraordinary item” of $30.5 million from “Phytosphere Licensing and Inventory Sale.” Net ordinary income was $211,419.

-Advertisement-

Featured Articles

Oberon Eyes Europe for Renewable DME

Leaders of Influence in Law 2024

-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-
-Advertisement-