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Best-of-Breed Hemp/CBD Producers ELLXF/CWBHF
http://www.streetwisereports.com/article/2019/04/02/best-of-breed-hemp-cbd-producers.html
Fincom Investment Partners surveys the hemp-CBD landscape and discusses two companies it believes are "best of breed."
CBD
Hemp/CBD heats up. Wall Street catches on.
Next wave begins: CVS Pharmacy and Walgreens sell CBD.
The hemp/CBD phenomena grows. Investors appear to be catching on. Our universe of publicly traded CBD "pure-plays" suggests the two "best-of-breed."
Charlotte's Web Holdings Inc. (CWEB:CSE: CWBHF:OTCQX) (CWEB) and Elixinol Global Ltd. (EXL:ASX; ELLXF:OTCQX) are pioneers in hemp/CBD. Both are fast growers. Elixinol, the fastest over the second half of 2018, has new, cutting-edge products and a lower relative valuation. This balances with CWEB's stronger name recognition and larger retail sales base. CWEB's Q4 sales rebounded after a hiccup in Q3 and had solid Q/Q sales growth of 21%. Both companies have positive EDITDA, which must be a shock to cannabis investors, with what we believe is a superior business model to cannabis growers. (Disclosure: A director of Fincom Investment Partners is a long-time CWEB reseller).
Re-iterating our suggested target price: $5.95
We continue to suggest fair valuation for Elixinol remains one-half of CWEB's—discounted 20%. CWEB's sales are more than 2X, which equates to US$5.95.
(Source: Fincom Investment Partners)
We visited the Elixinol booth at March's Expo West (Natural Products industry biggest trade show) (our 32nd year) observing a buzz of activity; there was a continual flow of interested buyers, while management kept heading off to private meetings with Big Box retailers. We hope to see positive news flow over coming months.
Elixinol is completing its expanded production facility in Colorado, with capacity similar to Charlotte's Web. We believe production capacity and years of actual production experience is the edge for both companies in a sea of competition for "Big Box" attention.
(Source: Elixinol)
Elixinol's 2018 sales were US$26 million, up 121% annually. CWEB's were $69 million, up 74% annually. Much of Elixinol sales are in lower margin private label, which becomes a strategic advantage since neither CWEB nor CV Sciences can boast significant experience with private label, third party or bulk CBD sales. Elixinol, perhaps, has a "leg up" on branded partnerships, building the "powered by Elixinol" brand—the brand behind the brands. We believe this is a stronger competitive "moat" than just selling through fickle retailers.
The Great CBD Boom starts
From our February 4 report: "We believe, however, the CBD boom will continue, after any near-term lag—most likely towards the second half of 2019, as new, larger retailers, such as Whole Foods and the Vitamin Shoppe, and perhaps drugstore chains, etc., begin stocking product."
CVS, the largest U.S. drugstore chain, began selling CBD products on March 20. This date may represent, in the clarity of perfect hindsight, the paradigm shift into the vast reaches of mass market CBD. CVS is taking a cautious approach, starting with topicals (external balms and lotions) to avoid any FDA repercussions.
Following CVS, Walgreens announced March 27 it would start selling CBD products in 1,500 stores. No reports on supplier. We doubt any retailer will sole source, so there is room for several CBD suppliers.
We suggest the CVS news is the spear's tip, and we expect 2019 will continue to be an exciting year for CBD.
We have long argued CBD (the cannabidiols, a non-intoxicant) is a larger market—and a better investment—than cannabis. We believe CBD will become a health standard, available in multiple OTC forms and routinely sold by mass retailers, like aspirin. The OTC market for pain relief, stress and sleeping issues is massive. CBD is a perfect fit.
Wall Street is beginning to catch on:
(Source: Cowen Group)
Yes, the Canadians are coming. But not quite yet.
Many of the large Canadian cannabis companies have announced intentions to enter the U.S. CBD space. These include Canopy Growth (CGC), which has talked up a $150 million investment into U.S. hemp farming and CBD production. It is not afraid to spend money. We suspect Canopy is most likely a CBD-brand buyer once it figures out that farming is not where the big bucks are—the $5 billion cash infusion from Constellation Brands came from selling and branding, not hops and barley farming.
Tilray (TLRY) recently purchased hemp (not CBD) maker Manitoba Harvest, which sells hemp granola, oil, protein powder and milk. Making and selling CBD is an entirely different process from making granola. Nice idea, but still quite a way from CBD. Otherwise, Tilray continues its long slide back to fair value (lower) from our September 2018 call to sell TLRY/buy CBD.
Aurora Cannabis (ACB) has purchased several hemp processors, but has no actual CBD brands in the market. There was considerable chatter about partnering with Coca-Cola to produce CBD-infused drinks, but so far nothing formal. And it still has to solve the CBD-is-oil problem (see below).
Cronos (CRON) has a partnership with Ginkgo Bioworks that may (someday) produce lower-cost custom yeast strains capable of producing cannabinoids. We hope this works out—something better—CRON Q4 cannabis sales of US$4.2 million hardly seem to justify a $3.3 billion valuation. Even if Marlboro invested.
The Canadian cannabis crowd are smart people and surely see the CBD opportunity. It's real. It's happening now and it's happening all across the U.S.
We expect more CBD-related listings in the U.S., but investors can own two quality producers now. We also suggest investors recognize CBD is not software. Planting crops, building production facilities and selling into a pipeline that already has plenty of quality product is not easy. It is going to take at least two years, at the earliest, before a new player can develop into serious competition. 2019 remains opportunistic for existing CBD pure plays. Given the challenges, we think cash and stock–rich cannabis companies would be wiser to try and buy CBD producers...with their inflated stock.
Another reason to sit with CBD shares.
(Source: Fincom Investment Partners)
Stick with the Best-of-Breed
Charlotte's Web was "launched" by a 2013 CNN documentary and has been growing since. Elixinol founder/CEO Paul Benhaim has worked in the hemp industry since 1991. There are now hundreds of wannabe CBD start-ups; we avoid them because we doubt they have staying power or pricing power. Competition will increase. The vitamin and "wellness" industry attracts charlatans like moths to flame, a risky combo when combined with the penny-stock crowd. Be careful.
Other CBD producers include CV Sciences (OTC: CVSI), and we own some shares (from a low 2018 price point) in case something happens. We have been disappointed with management. Retailers complain about poor customer service; investors complain management ignores them. Quarterly sales growth has fallen off a cliff, down to just 4% in Q4. Its NASDAQ application has sat DOA now for nine months, which means there has to be something wrong? Plus, management still bizarrely insists in dividing the company, confusing investors and wasting half the presentation—as a pharmaceutical developer. It has no patent, which the U.S. Patent Office keeps denying. To us, the drug dream is presently "worthless" and only heavily promoted as some sort of ego trip.
CWEB is better known in the U.S. and Canada
Yet Elixinol shares were Exchange-approved and the IPO underwritten by a quality firm (audited by Deloitte). Since over 80% of sales are in the U.S., the company belongs in the U.S. peer group.
CWEB sales are roughly split between e-commerce and independent retailers, while about two-thirds of Elixinol's U.S. sales are in private label and bulk.
Elixinol has about $30 million in cash; CWEB $73million.
Of the pure-play CBD manufacturers, Elixinol has, by far, the largest global exposure; it is expanding operations in Japan, throughout Europe, and, of course, Australia. The company is emphatic its investments are gaining traction and will pay off handsomely. We look forward to upcoming news. It already has a strong reputation for quality in the U.S.; if combined with what could become a true global CBD brand, Elixinol should present a compelling value proposition.
Evidence of aforementioned success could also make Elixinol an irresistible target for numerous global behemoths with fear of missing out on the CBD boom.
(Source: Elixinol)
New, industry-leading products
One reason why investors should consider Elixinol as part of a sector-related portfolio: new, exciting products. Elixinol's line of water-soluble CBD is the fruit of years of research, and leads the industry. Investors may recall the early hype about cannabis/CBD-laced beverages, but soon realized the challenges working with an oil-based product. Parties involved recognize the need to develop a working solution. Water-soluble seems better. Elixinol is already there.
Elixinol has the opportunity to increase market share, both in the saturated independent retail space, plus offers a unique and compelling product for Big Box retailers.
(Source: Elixinol)
Health benefits pile up for CBD
Scientific research builds and frequent reports from CBD users maintaining a better quality of life, quality sleep, pain and inflammation relief, etc., abound
The 55+ group is an often overlooked category, with great potential: the baby boomers. Cowen reports only about 4% of seniors have tried CBD; the upside then is enormous as CBD helps wonderfully with the common age-related aches and pains. Reported results are impressive:
51% of Seniors Who Have Tried CBD Report an Improved Quality Of Life 1
"42% of the seniors surveyed said they were taking the CBD to deal with inflammation, and 40.9% to deal with chronic pain. 38.6% said they were giving CBD a try in order to deal with poor sleep quality, and 31.8% used CBD to deal with arthritis pain. And it's working.2" (1,2Source: Forbes.com February 25, 2019)
We think the older done-it-all group has less interest in spending the day "stoned," with better interest in improved health. Tens of thousands take CBD daily, even if they often do not "feel" anything. Slides like those (below) could help CBD to grow into millions of users.
We propose, beyond short-term relief, any a good chance CBD could help prevent serious disease, we'll take it. And we do. Every day. Perhaps not scientific, but suspect plenty of others will. Maybe even you:
The 81-year-old, who hasn't been identified, repeatedly refused chemotherapy and other treatments to prolong his life (pictured a CT scan of the man's tumours in July 2017)Instead, the ex-smoker, believed to be from the Stoke-on-Trent area, opted to take CBD oil for two months to tackle his lung cancer (pictured, a scan of his cancer in November 2017)
Published slides showing an 81 year-old lung cancer patient who declined chemotherapy, instead taking CBD daily for two months. The resulting tumor shrinkage is nothing short of remarkable (Source: Daily Mail 3/5/2019)
Frederick Lacy, President of Fincom Investment Partners, began as a Chicago commodity broker in 1984. In 1987 he joined Bateman Eichler, Hill Richards in Los Angeles, focusing on small to mid-cap equities, ultimately "retiring" in 2000 as a Managing Director of Investment Banking. Mr. Lacy has been involved in numerous investments, from arranging start-up capital for what became Petrohawk, which sold for $15 Billion, to mobile payments in India. Several long-time clients were founding investors of Cheniere Energy. Mr Lacy's decades in California technology includes arranging an early $13 million VC financing for "permanent ledger" software (now commonly known as "blockchain") led by top-tier fund Upfront Ventures. Other investments include 3D holographic display technology, early mobile applications, power conversion, along with multiple consumer health-related products: Canadian Glacier bottled water, Kinetin skin cream, a proprietary oxidative-stress formula, and UV purification systems. In 1989 Mr. Lacy hosted "the Venture Capitalist" which aired on (now) CNBC, and has followed the natural foods industry for 35 years.
Important Disclosure: Fincom Investment Partners and related accounts have purchased, and continue to purchase, Elixinol shares in the open market. In addition, a Director of Fincom Investment Partners has been an executive and business owner in the nutrition industry for over 35 years, developed numerous close relationships in the industry, and has a business relationship with CV Sciences and Charlotte's Web. Fincom Investment Partners has started helping Elixinol, as a consultant. We have introduced distribution relationships, key management personnel and made other suggestions, based on our long and direct experience in the retail and wholesale nutrition industry. For this we are receiving a modest monthly consulting fee. We are not insiders and our investment opinion continues to remain our own.
Fincom Investment Partners Disclaimer
Prices as of 3/28/2019. This report is for informational purposes only and is not a solicitation of any security purchase or sale. We use a 0.71 conversion rate for Australia to USD and 0.75 for Canada. Opinions expressed herein by the author are not an investment recommendation and are not meant to be relied upon in investment decisions. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, Fincom Investment Partners cannot guarantee its accuracy. Do your own due diligence. Any opinions or estimates constitute our best judgment as of the date of publication, and are subject to change without notice. We recommend investors conduct thorough investment research of their own, including detailed review of the related Companies' filings, and consult a qualified investment adviser. Fincom Investment Partners and its officers and directors own shares in the securities mentioned in this report and may buy or sell shares at any time without prior notice. Fincom Investment Partners has a consulting relationship with Elixinol.
Streetwise Reports Disclosure:
1) Frederick Lacy and Fincom Investment Partners disclosures are above.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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I agree 100% with you. Our time will come with this one as well.
ELLXF is still under radar.. it will catch up to the party at some point.
I kinda thought Cweb would have pulled us along here today.
Agree and you’ve been spot on with your predictions but slow it down just a bit please I’m in a stock that’s going to go 3-400% (hopefully) within a month and when I cash out I’m going heavy in my CBD stocks lol!
HEMP BOOMTIME HAS BEGUN.....
I'm hoping to see their Sativa organic hemp skin line to hit retail chain stores soon. It could generate nice profit since there is not much competition out there yet and they have already 8 products just for skin line.
https://elixinol.com/sativaskincare/
Press Release: Elixinol Global Limited FY2018 Results Strong Revenue Growth of 121% Supported by Robust Balance Sheet to Drive Future Growth
12:33 pm ET February 27, 2019 (Dow Jones) Print
Press Release: Elixinol Global Limited FY2018 Results Strong Revenue Growth of 121% Supported by Robust Balance Sheet to Drive Future Growth
Elixinol Global Limited FY2018 Results Strong Revenue Growth of 121% Supported by Robust Balance Sheet to Drive Future Growth
SYDNEY, Australia, Feb. 27, 2019 (GLOBE NEWSWIRE) -- Elixinol Global Limited (EXL or the Group) (ASX:EXL; OTCQX:ELLXF), a global company operating in the industrial hemp and emerging medicinal cannabis sectors, is pleased to release its FY2018 results for the financial year ending 31 December 2018.
FY2018 KEY HIGHLIGHTS:
-- Group revenue increased 121% to $37.1m1 driven by continued strong sales
by Elixinol
-- Underlying EBITDA of $0.7m in FY2018 compared to breakeven in FY20172
-- Strong balance sheet with net cash of $42.7m to drive international
growth
-- Elixinol investing to build a global presence, with significant capital
deployed into scaleup, following positive regulatory developments
-- Hemp Foods Australia invested for top line growth during FY2018 with
revenue growing to $4.9m3 , up 51% on FY2017
-- Nunyara Pharma unique 60 acre land holding purchased in Australia in
early FY2019, post year end
(1) All dollar amounts are in AUD unless otherwise stated; Average AUD/USD for Q4 FY2018 = 0.7170
(2) FY2017 is shown on a pro forma basis
(3) Includes $0.3m of intercompany sales of Sativa products (eliminated upon consolidation)
A$m (December year-end) FY2017(2) FY2018
Revenue 16.8 37.1 (up 121%)
Underlying EBITDA (0.0) 0.7
Underlying NPAT (1.9) 0.7
Statutory NPAT (2.7) (0.9)
EXL is a diverse portfolio of hemp and cannabis companies trading globally including:
-- Elixinol - hemp-derived CBD business based out of Colorado, USA
-- Hemp Foods Australia - hemp foods, raw materials and finished products
-- Nunyara Pharma "Nunyara" - emerging medicinal cannabis business
Strong revenue growth reported in FY2018
For the first full trading year since its ASX listing in January 2018, EXL is pleased to report group revenue of $37.1m for FY2018 representing substantial 121% growth over FY2017.
Underlying EBITDA of $0.7m was achieved in FY2018 compared to breakeven in FY2017. Underlying NPAT was $0.7m in FY2018 compared to $(1.9)m loss in FY2017.
As at 31 December 2018, EXL has a strong net cash position of $42.7m ($42.9m cash and $0.25m in debt).
Operational update
Key activities by geography during the year:
United States of America
Elixinol
Elixinol reported revenues of $32.5m up 141% on FY2017. Elixinol has continued strong revenue growth across all sales channels which include direct to consumer, wholesale, private label and bulk sales led by broader consumer awareness and demand for hemp-derived CBD products.
In late December 2018, the much awaited 2018 US Farm Bill was signed by the US President, which saw hemp removed from the Controlled Substances Act. This major regulatory change paves the way for significant trade and marketing opportunities for the hemp-derived CBD industry. Research firm, Brightfield Group, revised its forecast for US market growth (September 2018), indicating that the US market size would grow from US$174m in 2016 to US$22bn by 2022 (a significant increase over its 2017 report projection of growth in sales to US$2bn by 2022).
Elixinol's sales initiatives and development activities are focused on penetrating mainstream distribution channels in the US to commence national distribution of its unique, high-quality hemp CBD products; to increase its digital marketing presence to further grow direct to consumer e-commerce sales and continue to advance its technologies to support its existing key private label and bulk sale clients.
Elixinol also initiated technology upgrades to its direct to consumer logistics channel. Further updates to Elixinol's website www.elixinol.com are expected in Q1 FY2019. Furthermore, to help build national brand awareness, leading advertising, public relations and marketing agencies are expected to be appointed in early 2019.
As hemp products have become more accepted by US consumers, Elixinol launched SATIVA Skin Care to US consumers on 8 December 2018. During the year, Elixinol's new product development team advanced its R&D efforts in new technologies and formulations in preparation for new product launches in 2019.
Post the reporting period, Elixinol has launched, via all regular US channels, a new branded product of water soluble, full spectrum, rapidly dissolving CBD powdered drink mixes. 'Create' version intended for the morning, 'Build' for the day, and 'Dream' before bed, designed for daily enjoyment.
Commissioning of Elixinol's Louisville facility is well advanced, following minor construction delays. Final commissioning is expected during H1 FY2019 which will more than double current production capacity. Once commissioned, operations will expand from an 8,700 sq ft facility to 20,700 sq ft, resulting in new production capabilities of 5,000 kg of ethanol extracted hemp CBD extract and 3,125 kg of CO2 extracted hemp CBD extract, with a bottling capacity of 24,000 bottles per day.
Elixinol entered into a farming joint venture, NCHPP in April 2018. The first harvest of high quality CBD hemp occurred in the final quarter of FY2018, with initial yields being lower than expected and anticipated to improve in future crop cycles. Outside of the NCHPP JV, Elixinol has secured the supply of raw material to deliver FY2019 revenues in excess of its current growth trajectory.
Australia
Hemp Foods Australia
Hemp Foods Australia reported revenues of $4.9m(4) up 51% on FY2017. Growth has been supported in regular channels (B2C, B2B, distributor and export) with the addition of Essential Hemp snack bar range.
To support the company's growth initiatives, 2018 saw a significant restructure of the sales and marketing functions to assist with driving into the mass consumer market, and provide improved efficiencies in the distribution of all Hemp Foods Australia's hemp products. Hemp Foods Australia also continues to develop arrangements for local supply of hemp seeds whilst continuing its normal operating activities with existing overseas suppliers.
During FY2018, Hemp Foods Australia invested in the development of new products and new food categories. A number of new product launches took place during the year which included the launch of SATIVA Skin Care to Australian consumers and a range of snack bars under the Essential Hemp(TM) brand. With the frozen and ready meal category forecast to see solid growth, Hemp Foods Australia has also been positioning itself to bring plant based nutritional products to consumers. Our focus into the branded product categories has started successfully in Q1 2019 with our hemp burgers launched into the plant based ready meal category.
(4) Includes $0.3m of intercompany sales of Sativa products (eliminated upon consolidation)
Nunyara Pharma (Medical Cannabis)
In late FY2018, EXL's Australian based medical cannabis company Elixinol Pty Ltd was renamed "Nunyara Pharma Pty Ltd". The name change was designed to clearly differentiate the pharmaceutical grade medical cannabis activities of Nunyara from those of EXL's Colorado-based business, Elixinol, which is focused on hemp-derived CBD dietary supplements and fast moving consumer goods.
Nunyara's licence submissions for the cultivation and manufacturing of medicinal cannabis continue to be under review by the Office of Drug Control (ODC) and we remain optimistic despite the ODC being unable to provide any timing on the granting of both licences.
The Development Application (DA) for the Nunyara's integrated cultivation and manufacture facility is under review. The comprehensive operational plan for the facility is completed and a project manager has been appointed to oversee the construction of the facility. A future focus will be on the construction of the company's state of the art facility.
The unique 60-acre lot is located in the Northern Rivers District of New South Wales, Australia and was purchased on 7 February 2019 for $2.6m. The first stage of the integrated state of the art medical cannabis cultivation and manufacturing facility will be a 5,000m(2) footprint on a secured 4.9-acre lot within the 60 acre property, with significant capacity to expand the proposed greenhouses as required and in-built expansion capacity within the proposed GMP certified, pharmaceutical grade manufacturing facility. Nunyara intends to leverage the significant know-how and experience of Elixinol's Colorado operations.
Rest of World
Set against a favourable macro environment, a number of key initiatives were deployed in FY2018 to drive top line revenue growth across EXL's businesses internationally in FY2019 and beyond. A core focus for Elixinol is growing sales in US, Japan, Europe and more recently New Zealand where Elixinol has recently entered and commenced sales.
In early 2019, a team of highly experienced sales and marketing employees commenced with Elixinol to drive the Group's launch into Europe. Sales hubs have been established in the Netherlands, Spain and United Kingdom and a new e-commerce website was launched Q1 FY2019 to facilitate European sales. Product fulfillment will be supported by local European based contract manufacturers. The European strategy incorporates both a direct sales force and sales via existing distributors. Market research shows that the European cannabis market alone will drive annual sales of EUR115.7bn by 2028 (European Cannabis Report 2018).
In November 2018, the Group's ownership interest in Elixinol Japan was increased to 50.5% (not currently consolidated into our results) via a $2.2m investment to fund working capital. Elixinol's focus in Japan has been on strengthening the management and sales function to support anticipated sales growth of Elixinol's CBD products. Additionally, R&D activities for novel hemp/CBD products specifically catering to the Japanese market are currently being undertaken.
(MORE TO FOLLOW) Dow Jones Newswires
February 27, 2019 12:33 ET (17:33 GMT)
Press Release: Elixinol Global Limited FY2018 -2-
Entry into the New Zealand market followed the passage of New Zealand's Misuse of Drugs (Medicinal Cannabis) Amendment Act in December 2018, which re-classified CBD with low levels of THC as prescription medicine and removes CBD as a Class B1 controlled drug. This change enables patients to import product from Elixinol's CBD range and the first shipment has successfully occurred.
Elixinol continues to explore opportunities throughout Asia and Central and Southern America and will ensure the market is fully informed of any future developments.
Growth Initiatives
Growth Initiatives
EXL is investing in top line revenue growth and production efficiencies across all businesses . This is being led through:
-- Continuing R&D into bio-available and water-soluble bio-technologies
-- Securing supply for growing demand
-- Implementing Enterprise Resource Planning systems
-- Manufacturing capacity
-- Distribution
-- Increased investment into marketing
-- Growing world-class team
-- E-commerce
Outlook
Paul Benhaim, CEO of Elixinol Global, stated, "We are very pleased with our revenue growth of 121% for FY2018 across our businesses globally.
Meetings with large national outlets have indicated that support from the FDA and United Nations will be the next major catalyst for industry growth in both the hemp and cannabis sectors leading to consumer awareness creating demand.
Previous drivers behind these sectors have been supported by several recent positive regulatory changes, including the passage of the US Farm Bill last December, the World Health Organisation's recommendation to the United Nations Committee of Narcotic Drugs to reschedule cannabis, the European Parliament's support and New Zealand's recent move to recognise CBD as a simply prescribed product.
Our robust balance sheet allows the Group to leverage our decades of experience to confidently execute on our strategic growth plans."
Reconciliation to FY2018 underlying EBITDA and NPAT
($m) FY2018
Statutory NPAT (0.9)
Tax expense 0.4
Depreciation & amortisation 0.8
Interest income/finance costs (0.4)
Statutory EBITDA (0.1)
Share based payment expense 0.8
Underlying EBITDA 0.7
Statutory NPAT (0.9)
Share based payment expense (after tax) 0.6
Amortisation acquired intangibles (after tax) 0.3
Tax benefit of losses 0.7
Underlying NPAT 0.7
* FY2017 is shown on a pro forma basis. EXL reports in A$ million and on a 31 December year end.
About Elixinol Global
Elixinol Global Limited (ASX:EXL; OTCQX:ELLXF) through its businesses has a global presence in the cannabis industry including hemp-derived CBD dietary supplements, hemp food and wellness products, as well as cultivation and manufacture of medicinal cannabis products. EXL's businesses include:
-- Elixinol LLC ("Elixinol"), founded in 2014, is a manufacturer and global
distributor of hemp dietary supplement and skincare products, with
operations based out of Colorado, USA.
-- Hemp Foods Australia Pty Ltd ("Hemp Foods Australia"), founded in 1999,
is a leading hemp food wholesaler, retailer, manufacturer and exporter of
bulk and branded raw materials, and finished products.
-- Nunyara Pharma Pty Ltd ("Nunyara"), formerly known as Elixinol Australia,
was founded in 2014 to participate in the emerging Australian medicinal
cannabis market and submitted licence applications for cultivation and
manufacture to the Office of Drug Control in early 2018. These
applications are currently pending approval.
See more at www.elixinolglobal.com
See more at www.elixinolglobal.com
Forward-Looking Information: This news release contains "forward-looking information" within the meaning of applicable securities laws relating to statements regarding the Company's business, products and future the Company's business, its product offerings and plans for sales and marketing. Although the Company believes that the expectations reflected in the forward looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Such forward looking statements are subject to risks and uncertainties that may cause actual results, performance and developments to differ materially from those contemplated by these statements depending on, among other things, the risks that the Company's products and plan will vary from those stated in this news release and the Company may not be able to carry out its business plans as expected. Except as required by law, the Company expressly disclaims any obligation, and does not intend, to update any forward looking statements or forward-looking information in this news release. Although the Company believes that the expectations reflected in the forward looking information are reasonable, there can be no assurance that such expectations will prove to be correct and makes no reference to profitability based on sales reported. The statements in this news release are made as of the date of this release.
The ASX has not reviewed, approved or disapproved the content of this press release.
Media Contacts
EXL Global
Cody Slach, Account Director
IR Department Managing Director, Liolios Group Inc
IR@elixinolglobal.com
+1 949 574 3860
(END) Dow Jones Newswires
February 27, 2019 12:33 ET (17:33 GMT)
Great article thanks for sharing!
The Power of Investing in Regular Habits
https://investorplace.com/2019/03/the-power-of-investing-in-regular-habits/
Mar 27, 2019, 5:00 pm EDT
The Power of Investing in Regular Habits
Investing using what you already know about consumers
By Luis Hernandez, Managing Editor
http://bit.ly/2CINeAj
It was when I purchased my house that I first heard of “The Starbucks Effect.”
The idea is easy to understand: a Starbucks near your house raises the value of your property. CBS News reported on the results of a Harvard study showing that when a Starbucks is introduced into a zip code, home values nearby increase by 0.5% within a year.
Starbucks isn’t the only one. You can find studies showing similar effects around Trader Joe’s and Whole Foods.
Tracking the correlation can be a bit of a chicken-or-egg question (BTW, the answer is the egg, but that’s another essay). Good retailers spot growing housing markets and open stores nearby.
At the same time, proximity to one of these retailers boosts home selling prices too because people are willing to pay a premium to be near their preferred brands.
And all this illustrates one of our favorite investing themes.
Let me explain….
We’re big believers in investing in products that are habit-forming.
It’s pretty easy to see why when you look at the history of the market.
If you look at the list of the 20 best-performing large U.S. stocks from 1957 through 2003 that kept their general corporate structure intact, you’ll note many of them sold branded consumer products.
Phillip Morris is at the top of the list. It was the top-performing large U.S. stock from 1957 to 2003. It sold cigarettes.
Coca-Cola and Pepsi Co. are on the list. They sold soda. Hershey Foods and Tootsie Roll are on the list. They sold chocolate and sugar.
These businesses produced more than 13% annual gains for decades. You won’t find anything better. Most companies can’t sustain 13% annual returns for more than five years. The businesses mentioned sustained those returns for decades. The reason they did so well is simple…
They sold habit-forming products.
When people form a habit around a product, it goes a long way toward ensuring repeat business. People get used to certain brands and they grow resistant to switching.
That resistance means they will happily continue buying the product even if the price increases a little. Both of these qualities help companies sustain sales growth and healthy profit margins.
For a recent example of this strategy, look to the coffee chain Starbucks. It’s one of the great success stories of American business.
From 1995 to 2006, Starbuck’s market value advanced more than 2,000%. Starbucks was very good at selling high quality coffee with a great brand, and shareholders made a fortune.
But don’t get the idea that the big gains for Starbucks stock are over. Neil George, editor of Profitable Investing, recommended buying Starbucks in early February 2018, and has since seen a lift of 38% in the stock price.
In fact, the coffee maker’s stock hit a new 52-week high yesterday. The chart below reflects the SBUX performance since Neil recommended buying it.
To be sure, SBUX had a tumultuous summer. Concerns over growth in China had a lot of people bailing out. But if you stuck with it, as Neil advised, you’re sitting on a nice profit.
Why is the stock doing so well? Growth and more growth to help people feed their Starbucks coffee habit. Here is Neil’s summary from earlier this year.
While there are nearly 30,000 stores around the world, there are still more coming. About half are owned by the company, with the rest under contract. And while there is arguably a saturation in the US market, in China, where coffee is challenging tea for market share, the company is pushing to get to 6,000 stores over the next four years.
Plus, as more and more folks are spending money on “experiences” rather than items to consume, Starbucks is moving to roll out more of its large roaster stores, which come across as a sort of brewpub for coffee fans, around the world.
And if experience isn’t what customers want, then there’s the speed and convenience through its new push with Uber and Alibaba (BABA) to deliver coffee right to your home or office. In the US alone, the company is geared to have 2,000 of its stores equipped for delivery in short order.
At this new high price, Neil is telling his Profitable Investing subscribers to only buy Starbucks on the dips.
But coffee isn’t even our favorite habit-forming trend for investors.
If you want to understand how to make money from habit-forming trends, make sure and read this recent Forbes story on Daniel Lubetzky, the founder of Kind Health Snacks, maker of the highly popular Kind Bars.
Kind rakes in an estimated $800 million in annual sales. Forbes estimates that the company is worth $2.9 billion, which makes Lubetzky’s share of the company worth over a billion dollars.
Lubetsky has found huge success by selling high-quality, habit-forming consumer goods that have such great brands people are willing to pay up for them.
Just like Starbucks….or Whole Foods….
That strategy is key to understanding the appeal of so many marijuana stocks.
And Matt McCall is putting that strategy into action with his Investment Opportunities service. Matt identified the marijuana trend years ago. Now, he is finding the stocks that are best poised to take advantage of this once-in-a-generation opportunity to build wealth.
Late last year, Matt started his Cannabis Cash Calendar campaign where he picks the new leaders in this global trend – the massively successful private companies that are fueling this surging market and now going public,
Many trade at just pennies a share, or maybe a few dollars. On Dec. 4, Matt made a specific call for one of these companies – Elixinol Global Limited (ELLXF).
Elixinol is widely regarded as one of the most influential CBD brands in the world. The business is divided into three units: dietary supplements, hemp foods, and medicinal cannabis. The first two make consumer products, which have huge upside potential. The third is in the pharmaceuticals sector.
The dietary supplement group is known as Elixinol USA. It generated 84% of the company’s sales in the first half of 2018. It sells 30 different products, from capsules to skin cream to dog treats.
Below is a chart with the stock’s performance since Matt’s call. The stock is up 128%!
Here is Matt’s latest update on the stock from earlier this month.
Elixinol Global Limited (ELLXF) reported strong fiscal 2018 results last week, with total revenue increasing 121% to $26.3 million. Its hemp-CBD business division accounted for $23 million of that, up an impressive 141% over the previous year. That strength is exactly why this stock was our first Cannabis Cash Calendar recommendation.
On top of expanding its brand awareness in the quarter, the company also launched its CBD-based SATIVA skin care line in the United States.
Matt believes Elixinol, and one other stock in his portfolio, have the potential to jump to a major U.S. stock exchange and sign a key deal with a national retailer. I can’t reveal the other stock out of respect for his paid subscribers, but Matt believes both have big long-term potential.
CBD products have amazing potential to be the next big habit-forming consumer trend. One estimate puts the size of the potential market at $22 billion by 2022. As Jeff mentioned Monday, even CVS has stuck a toe in the water by carrying CBD-infused lotions in a limited number of stories. It’s a small start but access to a retailer that size could be a huge catalyst for CBD sales.
And luxury brand Barneys New York recently announced plans to sell CBD-infused products and cannabis accessories in a new “luxury” head shop called The High End.
If you aren’t in the marijuana market yet, there is still time. Matt will reveal his next pick next week. Click here to see how to get that pick on April 4.
Retailers such as Starbucks and Whole Foods could begin to carry CBD-infused products, such as gummies or health bars or drinks, and the trend will only get stronger.
Regardless, investing in habit-forming trends is a winning strategy and we will keep you informed of the next steps in this market.
To a richer life…
Luis Hernandez, Managing Editor
and the research team at InvestorPlace.com
10 STOCKS SET FOR MONSTER GROWTH IN 2019
Adds one more positive box checked.
Yes, that definitely takes a pressure off the stock chart wise
Glad to see that gap filled.
...and second gap is closed.
I doubt it will go down all the way to MA50 2.48.. .. I think 2.7ish could the bottom if it gets there
Walgreens to sell CBD products in 1,500 stores
Walgreens will sell the cannabis-based products in Oregon, Colorado, New Mexico, Kentucky, Tennessee, Vermont, South Carolina, Illinois and Indiana.
Rival drugstore chain CVS introduced CBD-containing topicals, including creams and salves, to stores in eight states earlier in March.
https://www.cnbc.com/amp/2019/03/27/walgreens-to-sell-cbd-products-in-some-stores.html?__twitter_impression=true
Sweet comeback on big volume. Banking bill vote close
If this was the low then what a strong sob. But hey I always appreciate someone who can look at both fundamentals and apply TA. Seems like you always get one extreme or the other around these boards (ta vs fundies, rather than both)
Guess we’ll see tomorrow. That might’ve been it though. will probably take a few days to tell
2.9-3.0 closes gap and it gives you 50% retracement from last leg.
2.5 range would be more than 62% Fibonacci retracement.. I would doubt it would get there... however MA50 is only 2.46 currently.. let's see what happens.
First gap just closed. I think second gap is all the way down to 3.0
Where are you charting the gaps at
$3 bucks?-2-50 range.. somewhere in there
Yeah it might. I’d prefer it dips just high enough that it’s too high for people to jump in, then turns and leaves them behind.. as any bullish stock tends to do. But I’ll just keep an eye.. good buy Opp coming either way
....and here's the pullback.. I would like those gaps to be closed on a chart.. before another move higher
Yep, wild this is holding up with the sector down. I’m overloaded so I took a few off Incase it’s just trailing others
There are two gaps in a chart so I think pullback is in cards here.. surprised seeing it still staying in accumulation mode..
It must be still under radar and not attractive for daytraders.
The only thing Green on my board
Pullback day everywhere except here..
The 60.. the 30.. the daily.. it's all bullish lol. It very well could run further but it's all about risk management and better to sell into strength before the bids dry out. Especially on a low-volume play like this one.
60 min's super bullish
I agree. Took some off the table today as well. She should be coming back down soon and with the relatively low volume here, it may happen quickly.
Yeah, it’s really hard to tell with a gem like $ELLXF, but based solely on TA, you’re right
This is the #2 CBD stock to own, and we haven’t had earnings nor any major news announcement — which can occur at any time
I’ve decided to keep a very nice core position, and will add on dips. Ever since the CVS news — carrying CBD products, you know it’s just weeks away before we start hearing other major chain retailer announcements
The CBD sector has finally opened its eyes; we are still very early
Already doubled my investment from December, looking good. Did a little bit of profit-taking because I think we're a bit too overbought now and I don't think there's enough news to back it up. We'll see, though.
Im loving this.. just incremental moves. The real chasing has begun.
A 23,800 buy at 3.44 (above the Ask) went through a couple of minutes after open.
Looks like another new 52wk high day coming.. very strong open
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