Dixie Brands (USA) Inc: Pot Stock You’ve Never Heard of Set for Accelerated Growth

Dixie Brands (USA) Inc: Pot Stock Expects Growth to Accelerate in 2020Dixie Brands (USA) Inc Poised to Soar on New Successes

Dixie Brands (USA) Inc (OTCMKTS:DXBRF, CSE:DIXI) is a cannabis penny stock that’s poised for significant growth in 2020.

Recently, the company reported strong third-quarter revenue and gross profit growth. And thanks to a number of significant successes, the maker of cannabis-infused products has provided a strong outlook for 2020.

These successes, management says, have set the company on a path to sustained profitability, and Dixie Brands stock on a path to accelerated growth.

DXBRF Stock Overview

Marijuana-infused products may be new to most Americans, but Dixie Brands has been working on its award-winning cannabidiol (CBD) and tetrahydrocannabinol (THC)-infused products for nearly a decade. (Source: “About Us,” Dixie Brands (USA) Inc, last accessed November 28, 2019.)

The Denver, Colorado-based company operates in several U.S. states and is always looking to expand domestically. It’s also set to expand internationally, into Canada and Latin America. (Source: “Dixie Brands Announces Third Quarter 2019 Financial Results,” Dixie Brands (USA) Inc, November 27, 2019.)

Dixie’s cannabis-infused portfolio includes more than 100 products in 15 different product categories, including beverages, topicals, drops, candies, wellness products, and pet supplements.

DXBRF Stock Information

Market Cap $28.6 Million
52-Week High $1.21
52-Week Low $0.20
Shares Outstanding 125.7 Million
Float 109.7 Million
50-Day Moving Average $0.30
200-Day Moving Average $0.54

(Source: “Dixie Brands Inc. (DXBRF),” Yahoo! Finance, last accessed November 28, 2019.)

Q3 Revenue up 28%, Gross Profit Increases 27%

On November 27, Dixie Brands (USA) Inc announced that its revenue for the third quarter increased 28% year-over-year to $3.1 million. Revenue for the first nine months of 2019 advanced 98% to $8.3 million. (Source: Dixie Brands (USA) Inc, November 27, 2019, op cit.)

Third-quarter Colorado licensing revenue increased year-over-year by 32% and California license revenue nearly doubled. Meanwhile, consumer demand continued to outstrip supply in Michigan.

Third-quarter gross profit advanced 29% year-over-year to $1.3 million. Dixie Brands (USA) Inc reported a third-quarter net loss of $4.9 million, a significant improvement from the second quarter net loss of $6.7 million.

At the end of the third quarter, the company had cash of $892,312, versus $2.3 million at June 30, 2019.

Since the end of the third quarter though, Dixie Brands received $1.5 million in cash from three unsecured, non-dilutive loans from a new funding partner. These loans are expected to be the first of a broader financing plan.

Other Recent Developments

Dixie Brands has announced a number of recent successful developments, which position it for accelerated growth in 2020.

  • Finalized a binding agreement with Herbal Enterprises LLC (an affiliate of AriZona Beverages), which will see Dixie launch THC-infused beverages in the first half of 2020.
  • Signed a manufacturing and licensing agreement that will see Dixie expand into the Oklahoma medical marijuana market in the first quarter of 2020.
  • Inked a distribution agreement with Sunrise Beverage LLC to sell CBD-infused products to more than 1,000 retailers in Colorado.
  • Made deals with regional distributors in Alaska, California, Nevada, and Vermont.
  • Expanded retail presence of subsidiary AcesoHemp into 120 stores in Illinois, Indiana, Missouri, Kentucky, and Tennessee.
  • Prepared for the legalization of recreational marijuana in Michigan.

(Source: Dixie Brands (USA) Inc, November 27, 2019, op cit.)

Analyst Take

Dixie Brands has been around for almost a decade, but most people are not familiar with this leading provider of cannabis-infused products. And that’s not just because Dixie Brands stock only went public at the start of 2019.

That should change in 2020 though. Dixie Brands (USA) Inc has made major investments in 2019, further establishing its growth plan. This includes strong organic revenue growth, key strategic partnerships, new products, and expansion into new markets.

All of that should help fuel profitability and boost the value of DXBRF stock.