Elixinol Global (ASX:EXL) might be one of Australia’s biggest pot stocks, but its shares have fallen 5 per cent this morning after a bumpy March quarter.

The hemp grower, which more than doubled its full-year revenue in 2018, this morning told investors a reduced focus on “low margin private label business in the US” was to blame for a 31 per cent decline in revenue from the December quarter.

It also reported a steep 288 per cent rise in cash burn, spending $10 million compared with $2.6 million in the previous quarter. Net cash used in operating activities for the entire 2018 financial year was $5.8m.

Company boss Paul Benhaim flagged increased costs in March, telling Stockhead Elixinol was focused on chasing revenue.

“Our focus is not on profit… our focus is on growing revenues and taking advantage of the growing space to increase our market share. We feel that that is the most important thing to do right now,” he said.

Product manufacturing, advertising and marketing costs were the main increases quarter-on-quarter, with lower revenues meaning the increased costs were not offset.

The company says the reduction in private label sales gives it “expanded capacity” to handle expected future growth in higher margin products.

“We remain very confident in our future growth strategy as we continue to diversify our branded product mix with a focus on national retail sales,” Benhaim told investors.

“It’s a historic time to be participating in this rapidly growing industry as CBD pushes into global mainstream channels. EXL has engaged the services of a US distribution partner to drive sales of Elixinol branded products, starting with one major success of a leading US national retailer.”

It also says it has signed “significant” retail agreements in the UK.

In other ASX quarterly news today

P2P Transport (ASX:P2P) is in strife. The company has announced, amongst other things, that both its chairman and CEO, Matthew Reynolds and Tom Varga, have resigned effective immediately. P2P banked $16.1 million in revenue for the March quarter, down from $20.1 million in the previous quarter.

 

Abundant Produce (ASX:ABT) highlight seed sales. Abundant says sales of seeds increased tenfold in the March quarter, and that is in spite of the fact that March’s storms in Sydney caused about $50,000 worth of damage to the company’s infrastructure.

 

Vault Intelligence (ASX:VLT) produces a record quarter. The SaaS business posted its highest ever quarterly number of cash receipts, totalling $942k, plus a further $420k in refunds from government. That was on top of record new recurring revenue of $556k.

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