Cannabis edibles are expected to be one of the fastest-growing cannabis subsectors in the next four years.
According to a recent report by leading cannabis research firm Arcview Market Research, spending on edibles in the US topped $1 billion in 2018.
With Canada set to legalize edibles this year and more US states legalizing medical and recreational cannabis, the cannabis edibles market is set to explode in the next four years. Arcview estimates annual sales of edibles in the US and Canada could hit $4.1 billion by 2022.
Arcview CEO’s, Troy Dayton, said, “Established big-brand food and beverage companies are beginning to take notice of the cannabis edibles market and this is likely just the tip of the iceberg. As the edibles business grows and regulatory fears ease, the pace of intra-industry mergers and outside acquisitions will increase as well.”
It is obvious that this market is set to explode higher in the next few years. This is creating another great investment opportunity.
Today, I am going to reveal a promising young, US cannabis company that is in position to capitalize on the pending boom.
- This little-known cannabis company is an early industry leader in edibles and has been in business for almost ten years.
- Has one of the best edibles portfolios in the industry.
- Sales have been surging in the last two years.
Dixie Brands (CSE: DIXI, OTC: DXBRF) is a US-based cannabis company that is an early leader in the high-growth US cannabis edibles market.
Shares just began trading on the Canadian Securities Exchange in early December under the ticker symbol DIXI. I see average daily trading volume of 242,000 so this ticker is plenty liquid.
Shares also trade in the US on the OTC markets under the ticker symbol DXBRF. This ticker is less liquid with average daily trading volume of around 60,000 shares. However, that should still be plenty liquid for most investors.
Dixie has a market value of $65 million – that makes this a smaller cannabis stock and a fraction of the size of industry leader Canopy with a $10 billion market cap. These smaller cannabis stocks have solid growth potential but they are more vulnerable to short-term volatility and even share price manipulation.
These are the Four Reasons I am Bullish on Dixie Brands
#1 – Dixie is a pure-play on the high-growth US edibles market.
#2 – Dixie has one of the best product portfolios in the entire US cannabis industry.
These products are professional, well branded, and are sold in almost 500 stores in California, Nevada, Arizona, Colorado, and Maryland.
#3 – Dixie’s industry-leading product portfolio is driving impressive revenue growth.
Dixie delivered enormous revenue growth in its third-quarter results from early December. Here are a few highlights directly from the press release.
- Revenue was $2,435,000 in the third quarter of 2018, an increase of 110% from $1,162,000 of revenue in Q3 2017.
- Year-to-date, revenue was $4,205,000 in 2018, up 60% from $2,630,000 in the first nine months of 2017. Growth has been driven by increased sales of Dixie’s THC-infused products in Colorado, Maryland, and Nevada, as well as the Company’s CBD products.
- Gross profit of $1,038,000 in Q3 2018 was up 102% from $514,000 a year earlier, while year-to-date gross profit of $1,936,000 was up 57% over 2017.
#4 – Dixie looks like a great buyout target. I would not be the least bit surprised to see Dixie bought by a larger cannabis or consumer products company looking to expand into cannabis or edibles.
Dixie is up 50% in the Last Month and Looking to Challenge the 52-Week High
The Big Picture
The North America cannabis edibles market is set to explode in the next four years. Dixie Brands is an early leader in position to capitalize. Dixie is an early industry leader with one of the best product portfolios.
About the Author
Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.