Elixinol Global may mull acquisitions with possible longer-term US listing on horizon

	Column 1
0	Column 1 0 2‌1:18 AEST 07 May 2018 Elixinol Global may mull acquisitions with possible longer-term US listing on horizon

Elixinol Global [ASX:EXL], the recently listed Australian manufacturer and producer of cannabidiol (CBD) hemp oil for medical cannabis industries, may look at acquisitions to grow in Australia and Asia-Pacific down the line, CEO Paul Benhaim said.“There are definitely opportunities for us to consider and explore acquisitions in the future as we see fit,” he told Mergermarket.In January this year, Colorado-based Elixinol joined forces with Hemp Foods Australia and Elixinol Australia to form Elixinol Global, as reported. It listed with an offer price of AUD 1 per share in an oversubscribed AUD 20m (USD 15m) capital raising. It listed with a market capitalisation of nearly AUD 103m (USD 77.5m) and now has a market cap of AUD 169.32m (USD 127.25m).Benhaim, who has been involved in the industry for 25 years and is the largest importer and exporter of cannabis products in Australia, said the company is well positioned to make decisions on M&A “at the right time”, particularly given its exposure to the lucrative US market.He did not disclose how much Elixinol could spend on acquisitions as it is too early after listing on the ASX, he said. It is now well-funded to expand its distribution channels in Australia for hemp foods, as well as in the US for dietary supplements, and to fund the first modular greenhouse and cultivate cannabis in Australia, which is pending government approval, Benhaim said.As part of that strategy, Elixinol already has equity stakes in two undisclosed Japanese companies, the CEO noted.Meanwhile, Elixinol won’t rule out either a dual or secondary listing in the US once it has gained a stronger foothold in Australia and Asia-Pacific, although there are no plans on the immediate horizon, Benhaim said.Its overall strategy is to leverage the synergies between the three combined businesses and to invest in opportunities in a range of cannabis-related sectors, including hemp, CBD nutraceuticals and wellness products, hemp food products, and manufacture of medicinal cannabis products, according to its prospectus.Elixinol currently distributes hemp-based CBD products in 27 countries around the world, providing investors with access to global markets in the emerging sectors of hemp-based dietary supplements and skin care, hemp food products and medical cannabis products.CBD hemp oil is made from high-CBD, low-tetrahydrocannabinol (THC) hemp (the chemical responsible for most of marijuana's psychological effects), unlike medical marijuana products, which are usually made from plants with high concentrations of psychoactive THC.Under the new organization, Australian-based Hemp Foods Australia will continue to be a global manufacturer and distributor of hemp food products and skin care. Elixinol will continue to be the global bulk and retail provider of hemp-based cannabidiol (CBD) dietary supplements and topical products from US and European hemp. Newly formed Elixinol Pty Ltd will provide medical marijuana exported from Australia into regulated markets across the globe. Elixinol Global and its incorporated entities competes with ASX-listed cannabis companies such as AusCann [ASX:AC8], Cann Group [ASX:CAN], Medlab Clinical [ASX:MDB], and MMJ Phytotech [ASX:MMJ]. According to a report on small-cap business news website * regarding ASX cannabis stocks (showing their past two quarterly cash receipts), Elixinol generated AUD 5.9m in revenue for 1Q18, some five times more than the second-highest The Hydroponics Company [ASX:THC], which reported AUD 1.1m for the same period. The globally listed Elixinol group now has 50 employees in the US, and about 15 in Australia.Its largest shareholders include privately held Raw With Life (53.07%), D&G Health (12.36), Tiverton Food (3.63), and Germany-based RobotExpert (3.21).Bell Potter was lead manager and underwriter to its IPO. Its Australian legal advisor is Gilbert + Tobin, while its US legal advisors is Frost Brown Todd. It uses Deloitte for accounting, auditing, and taxation purposes in Australia and the US.Elixinol’s share price closed trade today at AUD 1.65, up 2.49%.by Adam Orlando in PerthWrite to Adam Orlando at [email protected] [/table]