While many states allow licensed, regulated companies to sell cannabis, federal illegality prohibits cannabis companies from shipping product across state lines, making expansion rather challenging. Alex Halperin discusses the strategies that Dixie Brands, Strainz and Vireo Health are using to overcome the barriers.
In the case of Dixie Brands, the company has a strong base in Colorado, and it has expanded via partnerships in which it licenses its brand and IP into Arizona, California and Oregon, and it it is set to enter Nevada in May. The company has a mass market strategy focused on quality products at a reasonable price.
Similar to Dixie Brands, Strainz is focused on Western States. Unlike, Dixie, though, it is launching in Washington, via a partnership with a leading brand there, DB3, the maker of Zoots, and will quickly introduce the brand to Colorado, where it is partnering with a local manufacturer, and Nevada, where CEO Hugh Hempel partially owns a license.
Vireo Health, in contrast, is focused on a very “medical” product, striving for FDA approval with its pharmaceutical grade medical cannabis consisting of oils and pills. The company won one of two licenses in Minnesota and then won one of the five licenses in New York. These are both very restrictive programs (no flower, narrow list of qualifying conditions), and the company, which as raised $20mm, is focused on establishing its brand in a way that will help it expand into other tightly regulated markets. Going forward, the company will look to partner in additional states.
Read Alex Halperin’s “Marijuana companies join forces to expand beyond state lines”: https://www.washingtonpost.com/business/economy/marijuana-companies-join-forces-to-expand-beyond-state-lines/2016/04/25/06218ce2-05b3-11e6-a12f-ea5aed7958dc_story.html