Never saw this coming.... Dixie Is Dead For those who have been following my thoughts on MJNA, I have shared my view that the big deal of 2012 with Dixie Elixirs, the Colorado-based maker of medibles, was in turmoil and that it really didnt matter. Unfortunately, while my prediction of the break-up proved accurate, this is going to be one nasty divorce. On Thursday, November 14th, CannaVests 10-Q disclosed that the company has filed suit against Left Bank (the DBA for Dixie Elixirs), Dixie Holdings and Red Dice Holdings, which is the J.V. owned 60% by MJNA (and 40% byTripp Kebers Dixie Holdings: On August 30, 2013, the Company filed a lawsuit in the Superior Court of the State of California, County of San Diego, against Dixie Holdings, LLC, and Left Bank, LLC. After the Complaint was filed, Red Dice Holdings, LLC, was added to the case as a defendant. The lawsuit seeks recovery of not less than $736,495.98, plus interest, which represents monies owed to the Company by the defendants for shipments of cannabidiol. The shipments were requested by the defendants and delivery of the merchandise was accepted. The case is currently pending and the Company is pursuing it based on claims for breach of contract, goods sold and delivered, open book account and account stated. This is a big problem in my view. I had hoped that Dixie and MJNA could separate amicably. The complaint filed by CannaVest states that only one $25K payment was ever made. In fact, when the CannaVest MJNA deal was announced, Dixie was apparently delinquent. MJNA should have disclosed this. The failure of MJNA (as 60% owner of Red Dice Holding) to pay CannaVest and deal directly with Dixie is also disturbing and shows that MJNA appears to be financially strained (recall that they borrowed $900K last quarter). The Dixie deal was DOA. There was no real progress on the original goal of expanding the brand. It has been a cash drain, and the Dixie Botanicals effort was a huge disappointment. Tripp Keber, who is still running RDH per MJNA filing, left the Board in early March, but this wasnt disclosed until April 30th. He was formerly the face of MJNA after Llamas left, but he hasnt mentioned MJNA in any public appearance since February to the best of my knowledge. I dont think the break up matters that much, when it is all said and done, as I have previously stated. Unfortunately, though, neither of these companies (MJNA and CANV) can afford to waste scarce resources on litigation. The fact that it has festered rather than been resolved is very concerning.
Posted on: Sun, 17 Nov 2013 20:41:19 +0000
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