Dixie-Khiron will take advantage of the complementary strengths of both companies to manufacture and distribute cannabis-infused products to the Latin American market. By combining Dixie's portfolio of more than 100 cannabis-infused products with Khiron's established footprint throughout Latin America, the companies aim to capture first-mover advantage and establish leadership in the region of 620 million people.
In accordance with the Agreement, Dixie will also manufacture and distribute Khiron's Kuida brand of cannabidiol (CBD)-based cosmeceuticals in the United States. Kuida is expected to be broadly distributed and is expected to have particular appeal to the growing U.S. Hispanic population, estimated at nearly 60 million.
Chuck Smith, President and CEO of Dixie Brands, stated, In the weeks since we announced this partnership it has become even more clear that the strengths of our two companies are perfectly aligned to lead in Latin America. Our marketing and regulatory teams have analyzed the opportunities and requirements across the region, and we are completing detailed business plans to secure 'first mover' advantage. By leveraging our existing infrastructure, intellectual property, expertise and distribution channels, we are moving quickly to introduce products to selected markets.
Latin American Market
Latin America is among the world's fastest-growing cannabis markets. According to Prohibition Partners, cannabis spending in the region is expected to reach US$12 billion by 2028, and Quintiles IMS estimates that there are approximately 68 million potential patients in Latin America that could benefit from medical cannabis. With six megacities of 10 million or more located in Latin America (UN Data Booklet: The World's Cities in 2018), the market offers an attractive, super-urban and informed consumer base for cannabis-infused consumer products, with an awareness of recognized global brands and access to a vast retail network that has seen five-year retail revenue growth averaging 10.6% per year (Deloitte Touche Tohmatsu: Global Powers of Retailing 2018).
Alvaro Torres, Co-founder and CEO of Khiron Life Sciences, stated, Our timing for launching this joint venture is ideal. Latin America is poised to become one of the world's largest cannabis markets, due to continuing legalization across the region and the increasing affluence of the population, particularly in urban areas. Despite these attractive dynamics, there are relatively few significant competitors, as many companies have targeted other global regions. We believe we have an opportunity to establish ourselves as a dominant player in this market.
Khiron operates in the Colombian market and has incorporated entities and obtained certain licenses with an objective to enter the Peru, Chile and Mexico markets. The Company has announced plans to enter Brazil and Uruguay through its proposed acquisition of NettaGrowth International Inc. (NettaGro). Upon completion of the NettaGro transaction, Khiron will be positioned in markets which collectively represent more than 430 million of the total Latin American population of 620 million people.