Buy Elixinol Global Stock — But Only After It Stops Falling

With all of the marijuana companies seeking market share, investors in North America could easily overlook Elixinol Global . However, Elixinol is the largest marijuana company in Australia, and it operates a hemp business in the U.S.

Unfortunately for ELLXF stock bulls, the equity has sold off along with other cannabis companies in the U.S. and Canada. Elixinol and other weed stocks may need time to find a bottom. However, once the selling stops, investors may have a lucrative buying opportunity in Australia’s largest cannabis company.

Elixinol Global consists of three subsidiaries. Elixinol USA is a Colorado-based hemp business. This division sells dietary and skin-care products derived from industrial hemp.

They also own Hemp Foods Australia. As the name implies, it offers food and skin-care products derived from hemp. The third division is an Australian medical cannabis company called Nunyara. Nunyara currently seeks approval from the Australian Office of Drug Control to begin sales.

ELLXF Eyes Worldwide Expansion

As our own Martin Green pointed out, the company has also expanded into Europe. A deal with MedVec recently brought Elixinol products to 15,000 pharmacies in Germany. This likely is the result of a drive last year to attract A$40 million ($27.1 million) to fund expansion into Europe and Asia. The company also raised an additional A$50 million ($33.88 million) to support growth in the U.S. It also holds the intellectual property rights on technology from Bionova that has numerous applications in the field of nutrition.

Unfortunately, such progress has failed to make a lasting impression on investors. Since peaking at $4.25 per share in April, ELLXF has continued on a steady decline. Elixinol stock now trades for around $1.60 per share, taking it back towards the 52-week low of 95 cents per share it saw at about the same time last year.

Why ELLXF stock continues to suffer is not clear. Like most Australian cannabis firms, it loses money. However, it only lost A$860,000 ($582,700) last quarter. With A$42.92 million ($29.1 million) in the bank, they can afford to maintain this pace for a while. Moreover, the stock trades at 8.3 times sales, which compares well with other weed stocks.

Elixinol Global Stock Is (Almost) a Buy

Investors should consider a stake in ELLXF stock once the equity stops falling. Yes, Elixinol Global has not yet turned a profit. However, it has become the largest marijuana company in Australia, making it the Canopy Growth of that country.

Moreover, it holds enough funding for years to come and actively sells product in both the United States and Europe. Furthermore, though U.S. investors have to turn to the OTC markets, Elixinol stock trades on the Australian Securities Exchange (ASX) in its home country. Its size and global expansion could someday lead ELLXF stock moving to a mainstream U.S. exchange.

I do not recommend that investors fight the current downward trend. However, with its market position in Australia and its worldwide expansion in full swing, Elixinol Global stock appears positioned for massive growth and industry leadership.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

 

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Will Healy
Will Healy is a freelance business and financial writer based in the Dallas area. In addition to marijuana, energy, and mining stocks, he has also written about real estate, insurance, personal finance, and macroeconomics.In addition to Capital 10X, his articles have appeared on sites such as InvestorPlace, Yahoo! Finance, MSN Money, Kiplinger’s Personal Finance, GOBankingRates, and Seeking Alpha.Will holds a B.S. in Journalism from Texas A&M University, an M.S. in Geography from the University of North Texas, and an MBA from the University of Texas at Dallas.Phone: 416-721-8257. Address: 682 Indian Road Toronto, Ontario M6P 2C9.

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