Tripp Keber and his business Dixie Elixirs have been highlighted on 60 Minutes and more recently The Pot Barons of Colorado. Tripp is perhaps the most successful and visible entrepreneur in the cannabis space. In this interview you will learn about:
– Tripp’s background
– How Dixie Elixirs was started and how it got its name
– About the innovative delivery methods Dixie is developing for Cannabis
– Why Tripp believes we are in the midst of an exciting social change
– Why infused cannabis products are the future of cannabis
Matthew: Hi, I’m Matthew Kind. Each week I’ll take you behind the scenes to interview the insiders that are shaping the rapidly evolving legal marijuana industry. Learn more at www.cannainsider.com. That’s www.cannainsider.com. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That’s www.cannainsider.com/trends. Now here’s your program. If you recognize anybody in the cannabis industry from TV, it is probably our next guest Tripp Keber, CEO of Dixie Brands of Denver, Colorado. While Dixie has a full line of cannabis infused products, they are still best known for their elixirs which are infused drinks. Tripp has been featured on 60 Minutes and most recently as a central figure at MSNBC’s The Pot Barons of Colorado. Tripp, welcome to CannaInsider.
Tripp: Good afternoon Matt and Happy Holidays to you and your listeners.
Matthew: Well thank you. Tripp, can you tell us a little bit about your background and how you got into this business?
Tripp: Sure well, you know, it’s been a fascinating ride, if you will, certainly the last five years have been the most challenging, but certainly the most exciting five years of my professional career. You know, I moved to Colorado. I ended up here in February of 2002, so celebrating, you know, 12+ years of successful living in Denver, Colorado. In 2009 I realized as the development industry, real estate development industry was really drying up, that there might be another opportunity and that was the Green Rush. So, you know, my career has generally been truly entrepreneurially have a high tolerance for risk. So I typically applied that. I’ve had various technology companies back East that were both national and international. Then recently I followed into the real estate development building resorts primarily in the South, specifically in the state of Alabama. And then certainly for the last five years been focusing my efforts solely on cannabis, both direct to the plant as well as ancillary service companies.
Matthew: And where does the name Dixie come from?
Tripp: Well, you know, ironically as I mentioned, we had a resort development company that was based in Alabama. And so some of my original team members, if you will, were also from the state of Alabama, and we named the company really to pay homage to those relationships. And so I never did I think that it would develop such a well-know brand, if you will. And so it really was something as simple as that, just that we had a commonality from the state of Alabama. I was born in Washington D.C. which is technically below the Mason-Dixon Line, so I was comfortable with it.
Matthew: Is Alabama considered the heart of Dixie? That might be a bone of contention, I don’t know.
Tripp: I don’t know. I’m not going to argue it since I grew up in Washington D.C. and now live in Denver, Colorado.
Matthew: Right. Now jumping into Dixie’s product line, can you tell us a little bit about all the different products you offer?
Tripp: Absolutely. I mean, I think Dixie Elixirs and Edibles was known for its flag ship product, Matt, which is that of the elixir. And that was a medicated soda. The media referred to it as a pop soda which technically was accurate I guess, but it truly drove me nuts because I thought we certainly had to the ability to develop something so much more sophisticated. But the elixir is indeed still our most popular product. It is the flag ship. Behind that there are 13 other delivery systems, if you will, innovative product lines give both the medical marijuana and the adult use consumer choice. And those would include edibles, which would be, you know, Colorado Bars and Dixie Rolls and the chocolate truffles. More recently to include now our Dew Dixie Mints which are a sublingual placed in your mouth offering 5mg, a truly low dose of active ingredient THC. And then certainly not to exclude our, you know, various lines of topical. So we have pain salves. We have muscle relief lotions and bath soaps. So all combined at any given time we have generally between 130 and 150 product skews, individual products. And we’re really excited about what 2015 has to offer which will include a minimum of three new delivery systems. So I’m really excited to start talking about those early in the next year.
Matthew: And which of the elixir drinks, which flavor is the most popular?
Tripp: You know, it’s tough to say because it really is based on seasonality. You know, we have our, you know, we started with three flavors in 2010 which were not exactly sophisticated. They were cherry, orange and grape. And fortunately today, four and a half years later, we have a much more sophisticated flavor and taste profile to include Sparkling Pomegranate and Peach. We have an Old Fashioned Sarsaparilla. So it’s difficult to say, but I mean we do some of the all time favorites which are that of the peach and, as I mentioned, the sarsaparilla. But it varies and on occasion we bring in new flavor profiles to tease the market, but really I think the single most popular elixir these is the brand new Dixie One which I think we’ll probably talk about a later, but that is a 5mg, 5 active milligrams of THC with a watermelon cream and it’s just absolutely a fabulous product that tastes delicious.
Matthew: Now that also kind of solves the problem or mitigates the problem of dosaging which is a big problem especially for tourists coming to Colorado who have no idea and tend to eat a whole candy bar or drink a whole drink. Can you talk a little bit about dosaging and Dixie One there?
Tripp: Absolutely. You know, Dixie has been notorious for being extremely conservative with respects to the levels of active ingredient, again THC, across all of our products. I think that’s primarily because the owner and CEO, meaning myself, has never had a real strong relationship with cannabis. And so when embracing cannabis of under the adult use rules here, I was always nervous that we were going to get too much. But, you know, more than a year ago we realized that it was likely that the adult use consumer was going to have a very very different interest and/or relationship with this plant from that of the medical marijuana patient who traditionally was a seasoned veteran and could ingest or enjoy a much higher dose.
And so with that we launched the thought process and bringing an innovated delivery system or delivery systems embracing a low dose. And so in the state of Colorado on dose is 10mg of active THC. We took it even more conservatively now, and so our Dixie One Elixir which is a watermelon cream, offers 5mg. And after about six months of reviews, sort of analytical data, it’s ironically out pacing the sale of the 75mg, our highest dose elixir, by almost three to one. And so I would suggest that this theory that we had, the adult use consumer wanting a lower dose and potentially being able to ingest more products over a longer period of time, just really paid off.
Matthew: Yeah people, I mean, maybe it’s just human nature. When people are eating an edible or having a drink it’s like, do you think they just don’t want to do the math where they’re saying okay I have to drink a quarter of this and it’s already open, and I like the flavor. Is that part of the theory behind it?
Tripp: You know I think so. If you go to a restaurant these days and you look at the portions that Americans are eating, it really is obscene. I think that coupled with the fact that Americans are not necessarily known for their discipline, and you know I’ll take part of the responsibility. These products, the taste profiles are truly superior. I mean they’re quite tasty, delicious if you will, and so we thought it would be prudent to offer obviously a very favorable taste profile, but also a lower dose to ensure that the adult use consumer was not going to consume too much of that active ingredient THC and have a negative experience. And I think you’ll start to see this concept apply to across all of our delivery systems, product lines. And then equally if not more importantly, if you can see other manufacturers follow suit as well. We’re really excited about what that product is going to offer to the state of Colorado’s out of state tourists but also citizens, residents here in the state that want to embrace marijuana for the first time or potentially for years and years to come.
Matthew: Great point. Now just rewinding a little bit, why did you choose to focus on elixirs out of the gate and edibles or infused products? I mean was that something when you decided to get into the cannabis industry that was your focus immediately or did you pivot to that?
Tripp: No, I did it for the simple reason I just wasn’t smart enough. I just did not understand how to cultivate marijuana. So there were really three options, right. You could grow marijuana for medical patients. You could be in marijuana infused products manufacture, or you could be a retailer serving the medical marijuana patient, if you will, the medical marijuana community. As I said, I don’t exactly have a green thumb. If I never grew marijuana, I’d probably be a happy guy. I mean, fortunately we have an incredibly sophisticated grow teams that focus on the commercial cultivation of marijuana. We have a strategic partnership with MedCanna who’s done an amazing job. But you know, as I said, I also didn’t understand really how you could market to, I mean, if you look at the economic or excuse me, the demographics of the medical marijuana patient, included a 23 year old lift operator who potentially had chronic pain which represented about 80 percent of the qualifying conditions, all the way up to maybe a 75 year old grandmother who had glaucoma. I just wasn’t smart enough to figure out how we could actually market to those individuals collectively.
And so we really figured out a way in which that we could develop a product or set of products that would allow us to medicate the masses. And again you know, 4 ½+ years later with 150 products, we’ve done an excellent job giving both that patient as well as the adult use consumer a broad selection of choice to embrace. It’s really paid off.
Matthew: Now moving to Dixie Dust, this is a pretty innovative thing that you’re doing here. Can you tell us how the Dust works?
Tripp: Sure. I mean, the Dixie Dust is really a highly concentrate, excuse me, a highly concentrated connoisseur grade THC. And it’s basically granulated oils, and it can be smoked or vaped. And you know, it’s certainly very popular with both the medical marijuana patient and/or the adult use consumer. To be blunt, on any given day we typically have a backlog because again you’re taking a very very highly concentrated oil and then rendering it into really a solid or a granulated oil. And as we both know, the dabbing community, concentrates community is very popular and growing. And so it’s been an interesting ride. I mean, it is not obviously our core focus because it represents a relatively small percentage of our overall revenue, but those hard core medical marijuana patients have really embraced this product coupled with the brand that they’re comfortable. These products are triple lab tested, and so that gives them the confidence based on the quality assurance, the quality control that Dixie has been committed to for, you know, 4+ years to reach out and embrace these products.
Matthew: Now let’s talk a little bit about CBD. Can you talk about some of the benefits that you’ve seen generally in the market with CBD and what about CBD excites you?
Tripp: Well you know cannabidiol, also known as CBD, in my humble opinion is truly a wonder drug, if you will. And this is where the true medicinal and redeeming qualities, if you will, of cannabis sativa and/or cannabis ruderalis which is also industrial hemp reside. And you know, 3 ½ years ago when we started to develop the intellectual property associated with our product line, which was under Dixie Botanicals, you know many people within the industry suggested that I would end up in jail in short order because our intentions were not only to distribute that to medical marijuana patients which was the community we were serving here in Colorado, but potentially consumers from around the country if not the globe.
And we started successfully distributing this product, cannabidiol rich products, whether they be tinctures or pharmaceuticals or a few skews associated with the topicals line, and we started distributing it domestically. I believe on probably no less than three separate occasions people reported me to the Drug Enforcement Agency for the distribution of what they believed was a CSA controlled substance Schedule 1. The fact of the matter is cannabidiol derived from industrial hemp which is a sister plant to marijuana or cannabis sativa, is really considered a dietary supplement. And so as long as it has below .03 percent THC, this is a product that is safely distributed, and candidly is one of the fastest growing segments of the industry. And we grew a business that was zero to millions and millions of dollars in a relatively short period of time. And that was exciting because patients and enthusiasts from around the country could embrace CBD for any purpose, whether it be stress or anxiety or anti-inflammatory purposes and do so safely without maybe the undesirable effect of, you know, euphoria. And so it’s been exciting. It’s been an amazing run. I mean it’s been widely reported that I successfully sold that company in June of this past year, 2014, and am in a non-compete environment for the next six months and that will expire early in 2015, and I think you’ll see some exciting things coming from this company associated with cannabidiol.
Matthew: Oh great. Now switching gears to AM Focus, can you tell us a little bit about that and kind of frame our understanding about how we should be thinking about Dixie Scripts and in particular AM Focus?
Tripp: Well, I mean, the AM Focus was script, if you will, that was created for people who really required pain relief, but also want to remain functional, I mean, focused and active. And I always have difficulties pronouncing some of these terms, but I mean ashwagandha has been out, and it’s to help mitigate the effects of stress without being a sedative. And so these scripts are great for chronic pain relief. They provide a consistent, reliable, long-lasting effect. And so obviously the key ingredient being THC, which is generally associated with euphoria and can assist with pain relief, but incorporated with other aspects, what we will call the entourage or a synergistic effect, really allow you to remain focused and alert. And so an incredibly popular product line that we continue to sort of build out on. So I think you’ll see again in 2015 some more products that will be focused on the active ingredient THC, but again allowing a patient and/or a consumer to really function efficiently throughout a day.
Matthew: Now I want to talk a little bit about brand building because Dixie’s just done an incredible incredible job with that, and I just want to understand how this works because my 65 year old mother would like a Dixie Elixir but so would my 21 year old cousin and those are two totally different demographics, and I just want to know how you did this. Is it accidental to some extent or is it intentional? What’s going on here?
Tripp: Well I mean first of all thank you very much for the generous compliment, and it really validates what I have stated was our initial mission is we wanted to give all aspects of the community, both the medical marijuana community which is what we served for the first 4 years and then more recently, since January of 2014, the adult use consumer. We wanted to give them choice, and you know, I’ve said it before, but you know, stealing from one, Matt, is plagiarism, borrowing from many is research. I laugh because I don’t drink coffee, but my business partner does. On any given day I call him part of the Starbucks nation. And you know, I understand fundamentally that drinking soda is generally not a good idea. It’s just not healthy, but on any given day or week I was consuming not one, not two, but three plus Izzes, if you will. And Izze is a soda here in the state of Colorado.
It’s distributed actually around the country, and they just did an excellent job marketing to me. I mean the product’s packaging was really attractive, and the flavor profiles were adult, and they, you know, really represented an effervescent product. And you know, if you look at Dixie 2.0 which is what we serve for the last 3 years of the medical marijuana regime, it looked almost identical. And so really looking at consumer packaged goods and seeing who are some of the thought leaders or the category leaders and really leveraging on that. Additionally, you know, we identified what we hoped to be best of breed thinkers, and whether it be strategic vendors like marketing agencies, originally Vladimir Jones, more recently Grit which is a Denver based agency. We really leveraged those skill sets that were not necessarily cannabis-centric or focused, and then brought them into our space, into our industry, educated them about the marijuana plant and really pivoted from there. And so it’s been incredibly exciting, and you know so many people give me the credit. It’s really unfair because there’s so many, you know, there’s dozens and dozens of team members, and then hundreds of vendors from all over the country that support this company. And you know, I would suggest that it’s truly paying off because I believe based on what we’ve dealt with for the last 8-9 months that Dixie is arguably one of the most recognizable brands in the country now as it relates to adult use marijuana.
Matthew: I would agree with that for sure. Now looking ahead to the next 12 months, I understand Dixie just raised some more capital. How are you going to use that capital to expand and grow into different markets?
Tripp: Well first and foremost everybody understands that you are not allowed to, by state and certainly not by federal law, to transport cannabis across state lines. And so by definition the industry is extremely inefficient. I just finished building, when we’re all said and done, about a $5 million mousetrap. And I would humbly submit that this is one of the finest state of the art marijuana facilities in the US. But unfortunately I have to build that in states like Arizona, Oregon, Washington, Nevada, Illinois, Massachusetts, Maine, if I intend to bring my brand there which obviously I do. And so these funds that we’ve subsequently raised from accredited investors and truly some amazing business partners that really check the box on a bunch of different categories. We use those monies to assist with the build out of our facilities and ultimately bring the brand to both medical marijuana patients, such as Arizona, but also adult use consumers now in Oregon and Washington State. And so I think you’re going to see hockey stick growth associated with Dixie brands over the next 12 to 24 months.
Matthew: And that does present some challenges there because there’s no interstate commerce allowed. So you essentially, do you have licensing partners in these different states? Is there some states where you’ll do some acquisitions? I mean, how does that work?
Tripp: Yes all the above. I mean the one thing that is consistent in this industry and that is change. And so each individual mark is unique unto itself, and so literally through the use of our legal partners, our legal teams and then our adept marketers, we really dig deep as to what each market will allow us to do legally because you’re really only as strong as you weakest link. So we are committed and truly passionate about compliance. And so in some cases it’s an arm’s length relationship where Dixie brands identifies the affiliate partner. And other times it’s potentially closer. It all just depends on what the market allows for. But to be very very clear, Dixie brands is really an IP firm, an intellectual property firm and does not deal directly in the manufacturing, cultivation and retail distribution of marijuana. It really is focusing on processes, formulations, innovative delivery systems and licensing that intellectual property to our partners. And that’s how we’re able to successfully bring that brand within the confines of each states’ laws successfully.
Matthew: Now where do you see the supply in demand dynamic in Colorado and perhaps Washington as well, settling in the next few years?
Tripp: Well, you know, that was what we call OTH, Matt. That is over the horizon, and it’s incredibly challenging to forecast what next quarter’s going to look like. I mean, you know, the adult use consumer, I think we all knew was going to show up and ring the bell on January 1st of this current year ’14. But I don’t think anybody and that includes myself, and I’m slightly embarrassed, sheepish if you will, you know, as considered a thought leader. I just had no idea what the voracious appetite was going to be for marijuana infused products.
I mean literally there are lines out the door with shops limiting one unit per customer, and the pricing has really gotten out of hand. But you know, I think you’ll start to see that. I mean at any given time my company has as much as a half a million dollar backlog, but as we create efficiencies in our production systems, we’re quickly catching up to that. But I think fortunately for me as a manufacturer but potentially unfortunately for cultivators, you know, cannabis in the state of Colorado and what ultimately will be Washington State, is clearly becoming commoditized and so prices are dropping at a precarious rate. And I think there was a statistic that was attributed to the department of revenue that there’s a million square feet in the city and county of Denver right now that is under construction associated with commercial cultivation of marijuana. And so that is going to flood the market. I read recently, Andy Williams who is a great friend and a business partner of ours, has 7,000 pounds of adult use marijuana in his vaults right now. If that were to be dropped onto the market, that would be disruptive.
I think three years ago cannabis was selling for between $350 and $400 an ounce for medical marijuana patients. Most recently I read about a distributor here in the state of Colorado, Live Well, that has 13 licenses. I think today they launched an ad campaign for marijuana to be sold $79 an ounce. And so that is disruptive pricing. For me as a manufacturer, that lowers my cost of goods sold. So I’m very very excited about being able to potentially offer products at a more affordable rate, and I think everybody benefits from it.
Matthew: I think that’s a great point for any entrepreneurs out there listening, you know, moving up to the top of the value pyramid with value added services, not just having a commodity is a really important thing to keep in mind. Now on TV you often appear as this larger than life persona that perhaps came out of the womb conquering industries. Can you tell us about a time when things didn’t look quite so rosy and there may have been some serious challenges that you had to push through in order to succeed?
Tripp: Well you know, I appreciate the compliments, and I’m sure my mother would appreciate it, but you know, I put my pants on like everybody else, and there are thousands if not tens of thousands of cannabis entrepreneurs, not only here in the state of Colorado but around the country that are conservative the same amount of respect and if you will an, you know, “atta boy”. Because in this industry you have to be delusional confident in yourself in order to be successful, and I think maybe that’s where you refer to that sort of larger than life. But you know, you referenced MSNBC’s Pot Barons of Colorado. You know just most recently last Sunday in Episode #3 you saw the true trials and tribulations. On any given frame I had my hands, my face in my hands or I was biting my nails. I mean there was an incredible amount of stress associated with this manufacturing facility because, you know, literally we were trying to manufacture widgets with a construction site swirling around us with the fire department trying to permit a facility that they’d never had any type of historical experience with.
And so, you know, listen not all days are perfect. I mean again, crisis management, if you will, by hour. And so what that delusional confidence, if you will Matt, truly keeps me going and you know, there’s been some dark days over the past 4 ½ years, but the future is so incredibly bright, not only for Dixie but the overarching industry, and it’s truly an honor, it’s a privilege to be part of it, to work alongside so many passionate men and women that are really changing the world for a much better place.
Matthew: Now is there anything on the political landscape that worries you right now. I mean we just had a very positive last couple of weeks because the Omnibus [ph] spending bill included a provision that would not allow the Department of Justice to go after states that have a framework of law set up for marijuana. But is there still anything on the horizon where you say hey, this is a threat and we should watch it?
Tripp: Well you know, I don’t have a crystal ball, but I can tell you the state of Colorado has got a very very strong regulatory framework with the majority of the state regulators and the state legislators in support. It’s important to note, Matt, that the state of Colorado was profiting immensely from this newfound industry potentially as much 60 plus million dollars have ended up in the state coffers from the sale of medical and adult use marijuana this year alone, and that’s probably only through the end of September. And so I think the states were previously “NIMBY” right, not in my back yard, are truly reaching out embracing. I have personally hosted delegations from all over the country, shoot, all over the globe, that are watching with great fascination, curiosity as to this wacky, social experiment that is taking place. I get it, right. We’re in the midst of political and legal change. We read about that every single day. You just mentioned this historic act with that Omnibus bill, but I think more importantly that it’s paying much greater dividends, much more a creed of value to our industry is the fact that we’re in the midst of social change, and that is so incredibly evident this past year. Marijuana has gone mainstream, and that is ultimately sort of debunking,demystifying the fact that there’s, you know, people in dark allies manufacturing pot brownies and serving them up to the public. That very well may be the case, but it’s probably from a gang member or from some loosely organized organization that is not fully compliant. And so that political, legal but most importantly social change is really what’s going to continue with the momentum we have in 2014 and beyond.
Matthew: Tripp, as we close, how can listeners learn more about Dixie Brands?
Tripp: Well Dixie Brands, I mean, we certainly have our website which is www.dixieelixirs.com, and we’ll continue to build out a more robust website. The reality is on any given day there is some journalist or some media outlets such as yourself that has been incredibly generous in making sure that the world understands that there are men and women here in the state of Colorado that are fully committed to building an industry under the strict rules and regulations with the state and supported us. We operate at the pleasure of the state of Colorado and ultimately the federal government. And so our intention is not only to do so responsibly as we bring the brand, but equally if not more importantly, to really educate the adult use consumer to embrace marijuana responsibly. We fundamentally believe that oil, if you will, infused products are the future of cannabis. And I think that ultimately is what makes Dixie Brands and its affiliate partners’ future so incredibly bright.
Matthew: Tripp, thanks so much for coming on CannaInsider today. We really appreciate it.
Tripp: It is absolutely my pleasure. Again I truly appreciate the opportunity. I wish you and your listeners a Happy Holidays, and good luck to us all in 2015 and beyond.
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