Elixinol Global Limited (ASX:EXL) Founder and Chief Innovation Officer, Paul Benhaim talks about the company's range of hemp products, its focus on the hemp-derived CBD market in the US, regulatory acceptance and outlook.
Jessica Amir: Hi, my name's Jessica Amir for the Finance News Network, and joining us today from Elixinol Global (ASX:EXL) is the company's founder and chief innovation officer, Paul Benhaim.
Paul, welcome to the network and thanks for coming along.
Paul Benhaim: Thanks for having us.
Jessica Amir: For those who haven't heard of EXL or Elixinol Global, just tell us about the company.
Paul Benhaim: Elixinol Global was founded early in 2018 when it listed on the ASX to take over three companies that I founded. The first is Elixinol itself, which is based in Boulder, Colorado, and is one of the leading global hemp CBD producers.
The second company is Hemp Foods Australia, which was the first and the largest certified organic hemp foods producer in the Southern Hemisphere.
And the third, which is why we listed, was to raise funds for a startup medical cannabis company called Nunyara, which has applied for its cultivation and manufacturing license. It's got one of those already recently, a manufacturing license for medical cannabis.
Jessica Amir: And now to your position in the market, just tell us how you differentiate from competitors.
Paul Benhaim: We're a vertically integrated company where we own our own farms, we own our own production facility and we own our own technology and that is one of the unique parts about our business.
Elixinol has technologies which include bioavailable water solubility. We make powders, we make nano technology, we make micro-encapsulated base products. We have in fact in Elixinol Global over a hundred different products on the market today.
Also, our distribution strategy is quite unique. We've gone for a multichannel distribution strategy and included that on a global basis.
Now that takes a little more time and a little more effort to prepare than a single focused strategy. We believe that the ceiling to our end market is significantly higher than what we see in the competition.
Jessica Amir: And so if you wouldn't mind telling us where can people get their hands on your products?
Paul Benhaim: We sell in the US in Albertsons or Safeway supermarket, which is the second largest national retailer in the United States. You can also buy it at many chiropractors, naturopaths, health stores.
So that's where you can buy the Elixinol CBD based products, as well as in Europe where you can buy it in national high street retailers in the United Kingdom and throughout Europe at different venues.
In Japan you can buy it in the airports and train stations and throughout many different speciality retailers, and then we've got the Hemp Foods Australia products which are now available in Woolworths (ASX:WOW). So you can buy plant-based protein vegetable burgers in Woolworths today in the frozen section, as well as in health food stores a number of other products from us.
But for all of our products you can buy them on our websites.
Jessica Amir: And Paul, what's your interest in other companies at the moment?
Paul Benhaim: Elixinol Global, as well as having its three subsidiaries, owns an interest in an number of other subsidiaries. Elixinol Japan we mentioned earlier, but we also have a interest in a pet company, so that's our pet CBD company. They're in fact the number one pet CBD brand in the United States. We see a very interesting growth and we announced a recent purchase order from that company of $18 million for which we produce for them.
We also have a 60 per cent stake in a company called Infusion Strategies. That company's partner, the other 40 per cent, is a company that has been in the ingredients market for many years. They have access to FMCG or CPG based companies, multinational companies, in fact, that allow us to have conversations to what we think will be one of the largest areas in the hemp CBD space moving forward.
Jessica Amir: The industry has changed a lot both here in Australia and around the globe, so how do you feel given what's going on, and what does this mean for the business in terms of regulation?
Paul Benhaim: We have regulatory consultants on our full-time staff both in the US and in Europe, and we have teams of legal people that we work with all over the world to ensure that we comply with all the legislation.
When President Trump signed the Farm Bill at the end of last year, that really opened up the possibilities for industrial and hemp. In the US, we are now waiting for the FDA to give clarification of which markets and which end products will be appropriate for expanding CBD products in.
So the regulatory changes have not yet finished and continue to expand and grow, but only in a positive manner so far.
Jessica Amir: Paul, you've also recently handed down your financials. Can you touch on some highlights?
Paul Benhaim: Well, we're very excited to have a continued quarter on quarter, half on half a growth in the company.
In the first half of 2019 we turned over $18 million worth of revenue and we expect to continue on our growth curve.
Jessica Amir: And just lastly, Paul, before we let you go, I'd just like you to touch on opportunities for expansion and also what you see on the horizon.
Paul Benhaim: Elixinol Global is well positioned. At the end of the first half of 2019 we had around $49 million in the bank. We also had significant inventories which we've been building and will continue to build for what we see as future growth.
From the conversations that we're in within the United States and Europe specifically, those two markets are looking very interesting for us, not including, of course, what's happening in Japan and the potential for Australia to grow as well.
So we feel very excited about the future and we are well positioned for growth with our new production facilities that have more than double the capacity of what we've had recently.
Jessica Amir: Wonderful. Congratulations. So much to look forward to. Paul Benhaim, thank you very much.
Paul Benhaim: Thank you.