Khiron Life Sciences (TSXV: KHRN) signs LOI with Dixie Brands
Khiron Life Sciences (TSXV: KHRN) and Dixie Brands (CSE: DIXI) announce signing a binding letter of intent to form a 50%/50% Joint Venture (JV) that will see KHRN market DIXI’s portfolio of branded cannabis-infused products in Latin America and DIXI market KHRN’s Kuida® cosmeceutical brand to the Federally legal U.S. CBD cosmetics market.
The highlights from the news release makes the following points:
Establishes KHRN as Latin America's Consumer Packaged Goods (CPG) leader with the addition of over 100 product Stock Keeping Units across 15 categories immediately available to commercialize into Latin American pharmacies and retail outlets
Gives KHRN immediate access to DIXI's portfolio of proprietary formulations driven by years of product development and brand building in existing federally legal markets
Accelerates KHRN's high margin product strategy in Latin America and positions KHRN as the cannabis CPG and Pharma focused leader in the region, combined with its scaled low-cost cultivation strategy
Provides DIXI with immediate entry into Latin America with KHRN, a recognized strategic partner with strong distribution relationships that will drive immediate product penetration in this lucrative and sizeable market of 620 million people.
KHRN will operate the JV from Bogota, Colombia with responsibility for regulatory matters, cultivation, manufacturing and distribution. DIXI will contribute intellectual property including its extensive brand portfolio, product formulations and production processes. The two companies will collaborate on the development of new brands and products as appropriate for local Latin American markets.
Both companies seek first-mover advantage in one of the world’s fastest growing cannabis markets.
Agreement leverages KHRN's cannabis cultivation expertise and DIXI's extensive portfolio of consumer brands, and delivery technologies across major CPG categories including Petcare.
Accelerates DIXI's cosmeceutical strategy in the multi-billion dollar U.S. cosmetic market by immediately launching KHRN's brand Kuida® as one of the first CBD brands targeting the U.S. Hispanic population, estimated at almost 60 million
Reaffirms first-mover advantage in Latin America, a region of 620 million people where regulators are rapidly embracing medical and adult use cannabis
I believe the stock market response to this announcement indicates investors are beginning to accept the leadership position of KHRN in the South and Latin American space. If this is correct, there is still considerable upside in KHRN and investors must reject the kneejerk response which is to sell and adopt the contrary view which is to buy. As I said above, this is not the time for “bye bye,” it is a time to “buy buy.”