The Elixinol Global Ltd (ASX: EXL) share price is rising today after the company released its quarterly activity update.
At the time of writing, the Elixinol share price is up 5.88% to 18 cents per share.
Elixinol's focus is the manufacture and distribution of industrial hemp products and early-stage medical cannabis business focusing on the importation, cultivation, manufacture and distribution of CBD and THC products (using the active compounds in marijuana).
Elixinol's quarterly business update
Elixinol's focus in its latest update was its "highly value-accretive" acquisition of leading German hemp-derived CBD player, CannaCare Health. According to the company the acquisition will deliver fast market entry and immediate, material scale in Europe's fastest growing CBD market.
Elixinol also highlighted its financial position, stating it was "well-funded", with $23.3 million in cash and equivalents to support acquisitive growth and sustain conditions in those markets — particularly its European ambitions — that are still COVID-affected.
In terms of sales, Elixinol reported a first-quarter FY2021 revenue of $2.3 million, which was a 26% decline on the previous quarter. In that period the company made $3.1 million.
In some good regulatory news for Elixinol, its products are now supported by a valid novel food application under the UK Food Standards Agency (FSA), which could lead to greater sales revenue in the future.
It's predicting growth in that market over the coming months, as the UK re-emerges from lockdown and Elixinol retailers begin to restock their orders.
What Elixinol management said
Elixinol Global CEO, Oliver Horn, said the company had struggled due to the coronavirus pandemic.
The first quarter of the calendar year is traditionally softer for retail, while consumers curb discretionary spend after Christmas and holiday trading periods. This seasonal trend was compounded by the continued impact of COVID in two of our key markets: the UK and US, where footfall into physical venues continued to be significantly reduced.
Pleasingly, in March we saw green shoots start to appear both in the UK and the US as the impact of economic stimulus packages, easing of COVID restrictions came into effect and increased vaccination rates started lifting consumer confidence.
Elixinol share price snapshot
The Elixinol share price has been a relatively steady faller since a very short-lived high of 47 cents a share in May 2020. Since then it's risen above 25 cents in December 2020 and February 2021, but has spent most of its time below the 20 cent mark.
It's now level with the start of 2021, but has lost 45% over the past 12 months.
