Why ASX hemp share Elixinol's (ASX:EXL) share price is moving higher

The Elixinol (ASX: EXL) share price leapt 15% higher on open this morning. We look at the ASX hemp share's acquisition announcement.

| More on:
range of hemp oil and skin products representing elixinol share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Elixinol Global Ltd (ASX: EXL) share price rocketed 15% on open this morning and is currently up 5% in intraday trading.

This comes after the ASX hemp company revealed it would acquire a leading German cannabidiol (CBD) company.

Elixinol shares were placed in a trading halt on 4 March at the company's request, pending this announcement. Shares started trading on the ASX again this morning.

What did Elixinol report on its acquisition agreement?

The Elixinol share price is moving higher after the company reported it would acquire CannaCare Health GmbH.

CannaCare owns CANOBO, which is among Germany's top CBD brands with a dominant position in Germany's drugstores. CANOBO has more than 4,500 physical retail distribution points, and its 20 products include CBD oils, sprays and skincare.

In the 2020 financial year, CannaCare reported 2.6 million euros (AU$4 million) in revenue with earnings before interest, taxes, depreciation and amortisation (EBITDA) breaking even.

Elixinol noted that Germany's CBD market was expected to grow faster than any other in Europe. The compound annual growth rate (CAGR) of 47% or more is forecast to reach US$600 million by 2025.

The agreement stipulates Elixinol will pay 9 million euros upfront, with 3 million euros in cash and the other 6 million euros in Elixinol shares.

The company reported that "upon attainment of FY2021 revenues of 12.9 million euros and 20% EBITDA, the maximum earn-out of 15.0 million euros is payable in Elixinol shares, making a total potential consideration of 24.0 million".

Management commentary

Commenting on the binding agreement, Elixinol global CEO Oliver Horn said:

We are incredibly excited about this transformational opportunity which leapfrogs Elixinol closer to its vision of becoming a profitable, global, hemp-derived consumer goods wellness business…

By acquiring CannaCare, we gain a strong foothold in Europe's fastest growth market of Germany and, together with our established UK business, will become a leading pan-European business of scale.

Completion of the agreement remains subject to all the standard conditions.

Elixinol share price snapshot

Over the past 12 months, Elixinol shares are down 18%. That compares to a 38% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date, the Elixinol share price is up 14%.

Should you invest $1,000 in Pyc Therapeutics Ltd right now?

Before you buy Pyc Therapeutics Ltd shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Pyc Therapeutics Ltd wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

The letters ETF with a man pointing at it.
Share Market News

3 fantastic ASX ETFs to buy with $1,000

These funds could be worth considering if you have money to invest in the share market.

Read more »

Businessman smiles with arms outstretched after receiving good news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a wonderful Wednesday session for investors today.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices.
Broker Notes

Macquarie tips 20% upside for this ASX 200 industrials stock

Let's see what the broker is saying about this stock following an update.

Read more »

A man with a wide, eager smile on his face holds up three fingers.
Gold

3 reasons this ASX 200 gold mining giant could soar higher into 2026

A leading expert forecasts more outperformance from this surging ASX 200 gold stock.

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

CBA shares hit a new $176 record high. Too late to buy?

What can stop this bank now?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why James Hardie, Mayne Pharma, Nufarm, and Resimac shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

Person pointing at an increasing blue graph which represents a rising share price.
Share Gainers

Why Adriatic Metals, Catapult, Seek, and TechnologyOne shares are racing higher today

These shares are having a good time on hump day. But why?

Read more »