DENVER and WOODBURY, NY, Aug. 7, 2019 /CNW/ – PRESS RELEASE – Dixie Brands Inc., a cannabis CPG company, and AriZona, maker of iced tea, signed a binding letter of intent on Friday, Aug. 2, 2019, to partner for the production, distribution and sale of cannabis-infused products containing tetrahydrocannabinol (THC).
Under the terms of this deal between Dixie Brands Inc., and the AriZona™ brand, through its affiliated entity, Herbal Enterprises, LLC, will direct brand and product conceptual design; while Dixie Brands will develop, formulate, manufacture and distribute the new portfolio of AriZona branded THC-infused consumer packaged goods.
“AriZona has always led the way in product innovation,” said Don Vultaggio, chairman of AriZona Beverages. “The cannabis market is an important emerging category, and we’ve maintained our independence as a private business to be positioned to lead and seize generation-defining opportunities exactly like this one. The cannabis category is an ideal space to bring the flavor and fun of AriZona into new and exciting products, and we selected Dixie Brands as our partner to bring these products to market after touring their best in class manufacturing facilities, and spending considerable time building a strong relationship with their management. Both companies share a heritage of quality, excellence in manufacturing, and doing things the right way, and we look forward to all this partnership has in store.”
“AriZona is a power brand,” said Chuck Smith, CEO Dixie Brands, “and the most iconic and recognized CPG brand to extend into the cannabis market, providing the evolving cannabis consumer with a fun and flavorful experience alongside an iconic brand they know and love. For nearly a decade Dixie Brands has crafted award-winning cannabis-infused products creating some of the most recognized and trusted brands in the industry, and we are thrilled to have found a partner that shares our values. This partnership marks a watershed moment for the popularization and expansion of the cannabis sector overall, and is another large step forward for Dixie Brands’ strategy to build a house of famous cannabis CPG brands.”
Based on the signed letter of intent (LOI), Dixie Brands and AriZona agree to complete definitive agreements within 45 days after the date of the LOI, or such other date mutually agreed to in writing by the companies, including a license agreement that shall grant Dixie Brands the right to use certain AriZona trademarks, brand and other necessary intellectual property in conjunction with Dixie’s extensive formulation, manufacturing and distribution expertise.
In connection with the execution of the binding letter of intent, but subject to the execution of definitive agreements and the receipt of any additional required approvals, AriZona or its affiliate may complete a strategic investment in Dixie Brands through the exercise of warrants granted to AriZona equal to the value of up to USD$10,000,000 in subordinate voting shares of Dixie Brands at an exercise price of USD $0.59 for a term of 24 months. Upon signature of the definitive agreement the company will make an announcement with the details of the agreement.
The initial term of the partnership is three years, with an option to renew for up to two additional terms of two years each.
Published at Wed, 07 Aug 2019 20:36:00 +0000