Door rotates again at pot stock Elixinol with return of the founder as chair
Health & Biotech
Health & Biotech
Nine months after he resigned as CEO and three months after quitting as chief innovation officer, Elixinol (ASX:EXL) founder Paul Benhaim is back as chairman.
He replaces Andrew Duff, who chaired the company from its 2018 ASX listing, and Greg Ellory who was appointed last year is being replaced by former Swisse Wellness CEO Oliver Horn.
Duff wrote in the annual report, released last week, that the appointment of current CEO Stratos Karousos in July last year “underpins Elixinol Global’s evolution from a founder-led company to a business focused on building Elixinol into a dynamic and trusted global brand with the operational processes and people to underpin this”.
The company Benhaim leads today is a slightly different beast under different pressures to the one he left.
Elixinol has battened down the hatches to refocus on the US hemp-derived cannabidiol (CBD) market, a highly competitive space.
It sold its interests in Hemp Foods Australia for $500,000, shut down the Australian medical marijuana enterprise and sold the land for $2.6m, and sold out of its Japan venture for $200,000 after it was found that products sold in the country were illegal as they didn’t comply with Japan’s strict hemp CBD sourcing regulations.
It is also facing a class action filed in the United States District Court for the Northern District of California that alleges its US products were mislabeled as dietary supplements. The company denies the allegations and said the claims were without merit.
The board said last month in response to an ASX query about persistent negative cashflow that it had been cutting costs and now has no “ongoing significant capital cash expenditure commitments”.
The company spent $1.4m on salaries for key executives and board members last year, or almost $2m once extra fees, super, termination payments and share-based bonuses are factored in.
Full year revenue dropped by 19 per cent to $27.2m and the company dropped from a $5.6m profit in 2018 to an $83m loss last year after large asset and goodwill write downs.
Elixinol’s cash pile more than halved to $20m and it had negative cashflow of $51 million last year.
But it is debt-free.
Bod Australia (ASX:BDA) says its product MediCabilis has been prescribed 3,064 times since July last year, and it has a churn rate of 26 per cent among patients. Of those prescriptions, 74 per cent are for chronic pain, epilepsy and stress and anxiety disorders.
Late on Friday Croplogic (ASX:CLI) issued news about its disastrous US hemp foray (the one that was supposed to make it up to $64m in revenue). It has settled disputes with a US service provider and its Oregon landlord, paying them $US650,000 each, and dissolved its US subsidiaries. The hemp crop ended up being valued at $580,000 to $2.09m.