SAN FRANCISCO, April 03, 2019 (GLOBE NEWSWIRE) -- Fincom Investment Partners surveys the hemp-CBD landscape and discusses two companies it believes are "best of breed."
Company mentioned: Elixinol Global Ltd. (EXL:ASX; ELLXF:OTCQX)
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. and Elixinol Global Ltd. 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 Charlotte's Web's stronger name recognition and larger retail sales base. Charlotte's Web's Q4 sales rebounded after a hiccup in Q3 and had solid Q/Q sales growth of 21%. Both companies have positive EBITDA, 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 Charlotte's Web reseller).
We continue to suggest fair valuation for Elixinol remains one-half of Charlotte's Web's—discounted 20%. Charlotte's Web's sales are more than 2X.
Elixinol's 2018 sales were US$26 million, up 121% annually. Charlotte's Web's were $69 million, up 74% annually. Much of Elixinol sales are in lower margin private label, which becomes a strategic advantage since neither Charlotte's Web 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.
We have long argued CBD (the cannabidiols, a non-intoxicant) is a larger market—and a better investment—than cannabis.
Continue reading this article: Best-of-Breed Hemp/CBD Producers
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Fincom Investment Partners owns securities of Elixinol and CV Sciences and has a business relationship with Elixinol, CV Sciences and Charlotte's Web.
The full disclosure is provided at the article's end: Best-of-Breed Hemp/CBD Producers