Bell potter research note out today... Full research note...

Bell potter research note out today... Full research note attached

HEALTHCARE

Elixinol Global (EXL)
Industrial hemp and medicinal cannabis
· Elixinol Global is a new company operating in the industrial hemp and the emerging medical cannabis sectors. It has three business units across Australia and the US, two of which have several years of operations with multiple products on market and led by a vastly experienced management team.
· Elixinol US is an established, leading brand in the nascent US market for hemp based nutraceutical products. The category is currently experiencing explosive revenue growth following recent regulatory changes to legalise the cultivation of hemp in the US and a growing acceptance of the clinical benefit from these products in controlling the symptoms of numerous chronic medical conditions.
· Health Foods Australia is based in NSW and is a company focussed on commercialising Hemp “superfood”. Elixinol Australia has been formed to develop and commercialise medicinal cannabis for the Australian and international markets. While Elixinol Australia is yet to commence operations, the legal framework is now established for the medicinal cannabis industry to commence in this country.
· The Group is led by Chief Executive Paul Benhaim who is the co-founder of both Elixinol US and Health Foods Australia. Following the IPO he retains 53% of the listed entity and is the largest shareholder by a considerable margin. Mr Benhaim is considered an expert in the field of industrial hemp and medicinal cannabis following more than two decades of experience in the sector both in Australia, the US and Europe. The Chairman is Mr Andrew Duff who is well known to institutional investors.
Valuation and Recommendation
· We commence coverage with a Buy recommendation and valuation of $2.12

Disclosure: Bell Potter Securities acted as lead manager of the company’s 2017 IPO and received fees for that service.

Recommendation:
Buy
Previous Close:
$1.59
Price Target:
$2.12