Pubdate: Thu, 31 May 2012
Source: Denver Post (CO)
Copyright: 2012 The Denver Post Corp
Contact:  http://www.denverpost.com/
Details: http://www.mapinc.org/media/122
Author: Steve Raabe

DENVER COMPANY WANTS TO TAKE MEDICAL-POT ELIXIRS NATIONAL

Smoke 'em if you've got 'em, but Dixie Elixirs & Edibles has a
different idea on the best ways to ingest medical marijuana.

Sipping and snacking - not toking - are the basis of Dixie's
fast-growing Colorado business, which now is poised to go national.

The Denver-based firm specializes in the production and distribution
of food, beverages and other products infused with the active
ingredient of marijuana.

Led by its flagship line of THC-laced sparkling beverages, items also
include chocolate truffles, crispy rice treats, fruit lozenges,
capsules and droplets. The company's target market is registered
medical-marijuana patients who prefer, for health or social reasons,
to ingest their drug without smoking.

"If I needed to medicate, I would never consider lighting up in front
of my 11-year-old daughter," said Dixie owner and managing director
Tripp Keber. "A 70-year-old grandmother with glaucoma (might) never
consider smoking but will put a couple of drops of elixir in her soup."

THC-infused edible products now constitute about 38 percent of total
sales at dispensaries in Colorado, compared with 12 percent two years
ago, according to estimates from Keber that are based on conversations
with retailers.

Dixie sells products to 450 of Colorado's 593 medical-marijuana
dispensaries.

Colorado law allows local manufacturers to distribute THC-infused
items only within the state. But Dixie, already among the largest of
Colorado's infused-product makers, is staking out a share of the
national medical-marijuana market through a licensing deal that will
enable its branded products to be made and sold in other states.

Publicly traded Medical Marijuana Inc. last month paid $1.45 million
to acquire Dixie's intellectual property, formulas and recipes. The
two companies have created a third, Red Dice Holdings, to license and
market Dixie's brand and products in other states.

The firm expects to be selling in Arizona, California and Washington,
D.C., before the end of the year.

For a nascent industry that didn't exist 18 years ago and now is legal
in only 16 states and the District of Columbia, rapid growth is forecast.

Consulting firm See Change Strategy LLC said in a recent report that
national medical-marijuana sales of $1.7 billion in 2011 could grow to
$8.9 billion in five years. California and Colorado account for 92
percent of the current market. California leads the nation, with sales
of $1.3 billion, according to the report.

Analysts say delivery of medical marijuana through edible and
drinkable products is likely to increase in coming years, in part from
a growing number of older patients who never have smoked marijuana
recreationally.

"For a patient coming in who has never used marijuana before, they
might be very open to that kind of (edible) delivery mechanism," said
Robert Frichtel, managing partner of Medical Marijuana Business
Exchange, a Teller County-based consulting firm. "There are a
significant portion of people using marijuana for medical reasons
where it's not desirable for them to smoke it."

Dixie employs 22 workers at an industrial building near Interstate 70
and Quebec Street, where it makes edible products from THC kept in a
secured vault.

The privately owned firm does not disclose financial information, but
Keber said sales have increased 22 percent year-to-date in 2012
compared with last year.

Keber's business background includes a stint as chief operating
officer of Bella Terra Realty Holdings, a firm that operates high-end
recreational-vehicle parks.

In 2009 he made a loan to Dixie's original operators. A year later, he
took control of the business and sought to expand its reach.

Dispensary owner Max Cohen said most of his customers buy smokable
marijuana, but the edible segment is growing.

"The majority of our patients still prefer the (marijuana) flowers to
smoke," said Cohen, owner of The Clinic, which operates six
dispensaries in metro Denver. "But there are some people who don't
like to smoke, and it's easier for them to consume edibles."
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MAP posted-by: Matt