Cannabis Drinks-Maker Dixie Eyes IPO This Year to Fund Takeovers
(Bloomberg) -- Dixie Brands Inc., a U.S. maker of marijuana beverages, is considering an initial public offering toward the end of this year or early next year as it seeks capital for expansion and acquisitions.
The company, which hasn’t mandated bankers yet, is eyeing a listing in Canada, Chief Executive Officer Chuck Smith said Thursday in an interview on the sidelines of the Cannabis Invest U.K. conference in London. Dixie will have about $20 million in revenue this year and up to about $50 million in 2019, Smith said.
“We need access to capital, we need liquidity because this growth is very expensive,” said Smith, who founded the company in 2009 and remains its majority shareholder. “We’re going to continue to acquire brands or innovate them.”
Denver-based Dixie, which makes cannabis-infused berry lemonades, root beers and chocolates, closed a funding round of $4 million this month as it plans to expand operations into up to 10 more states, up from four states currently that include Colorado and California.
The listing possibility comes as investors pile into weed stocks in Canada, with grower Green Organic Dutchman Holdings Ltd. announcing this week that it was boosting the range on its IPO by as much as 15 percent after easily raising the C$100 million ($78 million) it sought last month.
Producers are opting to list in Canada because marijuana is prohibited at the federal level in the U.S. for medical as well as recreational use. Medical use of cannabis is lawful throughout Canada and federal legalization for recreational use is expected to begin this summer.
U.S. public opinion is shifting toward legalization, with 64 percent of Americans favoring it, according to an October Gallup poll. That’s the highest percentage since the group began asking about the topic in 1969, when approval was 12 percent.
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