Cannabis stock Elixinol Global (ASX: EXL) has more than doubled its revenue and delivered a maiden profit in the first six months since listing on the Australian Securities Exchange.
The company, which operates in the industrial hemp, dietary supplements and emerging medicinal cannabis sectors, today released its financial results for the first half of 2018, reporting a group revenue of $14.9 million – up 110% on the 2017 first-half.
An underlying EBITDA of $800,000 and net profit after tax of $600,000, compared to the previous year’s losses of $100,000 and $300,000, respectively, means this is the first profit position for the company.
According to Elixinol chief executive officer Paul Benhaim, it is the only ASX-listed company in the cannabis sector to record a profit so far.
“We have delivered exceptionally strong top line growth, which has seen the company more than double its size,” he said.
Elixinol debuted on the ASX in January, raising $20 million via its initial public offering. Funds went towards the company’s planned growth and development of Australia-based facilities for cannabis cultivation, extraction and manufacturing.
Hemp foods drive growth
Elixinol’s first-half growth was driven by strong sales in the consumer products division, which includes hemp-derived foods and dietary supplements.
Its Hemp Foods Australia business reported a 71% jump in revenue to $2.3 million while Elixinol USA delivered a 119% revenue increase to $12.5 million.
Regulatory change in Australia last year made the sale of hemp food products legal and resulted in a massive 519% boost in bulk sales for Hemp Foods Australia.
“We expect this [growth] to continue with launches of our own finished food products and penetration in the cosmetics segment through our SATIVA Skincare range,” Benhaim said.
In the US, the company has invested in farming and production capabilities including securing a cultivation joint venture with Kersey Ag Company to produce and supply high cannabidiol hemp.
As a result of the joint venture, Elixinol USA will relocate to a larger production facility in Colorado, expanding its production capacity from 8,700 square foot to 20,700sq ft. The commissioning of this new facility is on track for completion in late 2018.
The company is also awaiting presidential sign-off of the 2018 Farm Bill, which passed through the US Senate in June.
According to Elixinol, the signing of this bill has the potential to accelerate growth for the company as it will permit mainstream advertising of hemp-derived products as well as increase Elixinol’s access to banking and insurance services and provide better water rights.
The company’s US business currently exports product to 40 countries.
“Major activities are underway to further develop localised marketing and sales activities and strengthen customer channels in Europe and Japan including optimising existing distribution agreements and alliances,” Elixinol stated.
Under its Australia-based pharmaceutical division, the company has submitted its licence applications to the Office of Drug Control for the cultivation and manufacturing of medicinal cannabis.
Elixinol stock had increased 7.34% to $1.54 by midday trade.