Mr. Chuck Smith reports

DIXIE BRANDS TO INTRODUCE CANNABIS-INFUSED PRODUCTS IN MICHIGAN BY END OF MARCH

Dixie Brands Inc. has executed a definitive agreement with Michigan's Choice Labs relating to the joint venture licensing agreement of the two companies first announced on Feb. 6, 2019. The companies expect to have a selection of THC-(tetrahydrocannabinol)-infused products available for sale in Michigan provisioning centres later this month.

"We are completing our initial production runs and will have products on shelves by March 31, which is within eight weeks of signing our letter of intent with Choice," said Chuck Smith, president and chief executive officer, Dixie Brands. "This time to market is achievable thanks to our proven operating procedures and product formulations, as well as our past experience expanding into new states and, of course, an excellent local partner. We will begin generating sales this month and expect Michigan to be one of our top revenue-producing states."

Dixie initially intends to offer Michigan's 300,000 medical marijuana patients its THC-infused gummies, flavoured Elixirs, pressed pills, mints and tinctures, as well as its THC- and CBD-(cannabidiol)-infused topical balms. The company will expand its product offering in the state over time to include its flagship Dixie Elixir beverages and other SKUs drawn from its portfolio of more than 100 products across 15 categories. More information about Dixie's products is available at the Dixie Elixir website.

Dixie-branded products will be available to all provisioning centres in Michigan, consistent with the strategy Dixie has employed in other states where its products are typically sold in more than 80 per cent of all dispensaries. The company has already secured purchase orders and expressions of interest from several chains and individual provisioning centres interested in expanding their offering to include more recognized brands.

Michigan is the first new U.S. state Dixie entered in 2019. The company set a goal to enter four to six new states this year, in addition to its existing operations in California, Colorado, Maryland and Nevada. The company's 2019 expansion plans are fully financed following a $25-million financing completed in October, 2018.

Total retail sales of THC products in Michigan are estimated to exceed $750-million by 2020, according to New Frontier Data, making it the sixth-largest cannabis market in the United States.

Choice Labs is a leading medical marijuana company licensed by the State of Michigan to grow, process and sell cannabis. Choice is Michigan's first vertically integrated cannabis producer, operating a grower facility, a processor facility and multiple provisioning centres. Choice uses a sophisticated carbon dioxide cannabis extraction technique that is clean, safe, efficient and versatile. The new manufacturing facility has been set up at Choice's 10-acre campus in Jackson, and is making use of Dixie's proven GMP (good manufacturing practices) and quality control procedures, proprietary formulations and comprehensive lab testing of all products. The term of the agreement is for 10 years with two five-year options to renew, and the parties are working together to create and implement a comprehensive sales and marketing strategy.

About Dixie Brands Inc.

Dixie Brands, through its licensed partners, has been formulating award-winning THC- and CBD-infused products since 2009, and is expecting to double its manufacturing and distribution capabilities in 2019 in the United States, as well as expand internationally, including Canada and Latin America. Dixie leads the global industry in the development, packaging design, product innovation and quality control for the commercial production of cannabis infused products. While the company started with a single flagship product, the Dixie Elixir (a THC-infused soda), it is now one of the industry's most recognized consumer brands, expanding to over 100 products across more than 15 different product categories representing the industry's finest edibles, tinctures, topicals and connoisseur-grade extractions, as well as world-class CBD-infused wellness products and pet dietary supplements. Dixie's executive team has been instrumental in the formation of the marijuana industry for recreational and medicinal use, serving as founding members on several national regulatory and business-oriented industry organizations.

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