Elixinol (EXL) look like they are breaking out and for good...

Elixinol (EXL) look like they are breaking out and for good reason – the US Farm Bill is “very close,” EXL revenue is growing +159%pa (>$53m in CY19) and in a few quarters EXL will eclipse the revenue (in growth and absolute $ terms) of their largest competitor and global leader Charlotte’s Web (CWEB)

Firstly, REUTERS is reporting a deal on the US Farm Bill is ‘very close’ – this would effectively mean prohibition is over. More importantly, if this Bill goes through, EXL would be able to advertise on Amazon, Facebook, Google etc, this would have a material effect on revenue growth (already growing +159%pa WITHOUT Hemp being federally legal).


Secondly, this week we saw EXL’s largest competitor Charlotte’s Web (CWEB.CNQ) report Q3 revenue growth of (only) +57% to $17.7m. This implies EXL is winning greater market share than the market leader, given EXL grew Q3 revenue +159% to $10.4m

In fact, if you extrapolate these growth rates forward (debatable perhaps, but instructive nonetheless) EXL will overtake CWEB in absolute $ terms in 1-2qtr’s (~$28m/qtr each in Q4CY18, EXL could do $69m in Q1CY19 and CWEB $45m).

There is $1.2bn difference in marketcaps between EXL and CWEB – this makes no sense.

CWEB marketcap is $1.5bn. EXL marketcap $270m. Go figure.

EXL is firing, and that’s even before we hear about potential acquisitions or receiving their medicinal cannabis license in Australia, which currently has $0 value (vs peers CAN, AGH etc which are capped at hundreds of millions of $’s).


EXL are way too cheap for the growth – strong Buy.

CWEB trade on ~10x EV/Revenue, EXL trades on 5x, let’s say that goes to a bit less than the midpoint of the two (7x) and you get $3.00/share for EXL. Last $2.20.