One of Australia’s largest cannabis and hemp firms is struggling on the open market as it looks to sell off some of its assets in an effort to focus on the hemp-derived cannabidiol (CBD) market.

Shares of Elixinol Global (ASX:EXL,OTC Pink:ELLXF) slumped 25 percent from market close on Friday (January 31) to the start of the trading session on Monday (February 3) after it told investors it is selling its subsidiary Hemp Foods Australia to a Chinese manufacturing company for AU$500,000.


The cannabis producer is also halting its plans to apply for a medical cannabis cultivation licence for its Nunyara subsidiary and is selling all the assets attached to this operation, including a plot of land.

 

Gold Outlook 2021!

   
Gold Price Outlook, Top Stocks and More! Download today!

Elixinol ended the trading day on Thursday (February 6) at a price of AU$0.69 per share.

With the two sales, Elixinol is looking at a total of AU$17.3 million in impairment fees.

Hemp Foods Australia will be sold to a subsidiary of Shanghai Shunho New Materials Technology Co. (SZSE:002565), though the completion of the sale is still dependent on a purchase agreement between the two companies. This deal will name Shunho as the exclusive manufacturer and distributor of Elixinol’s CBD products in China, Hong Kong, Taiwan and Macau.

As a part of the three year licencing agreement, Elixinol will have the ability to audit and inspect the materials, facilities and Elixinol-branded products under Shunho’s name to ensure standards are met.

The sale is set to be completed sometime in the first quarter of 2020, Elixinol said in a press release, and carries a fee of AU$12.5 million. However, the company said the transaction will improve future cash flow and will allow it to focus on its CBD businesses.

“During negotiations of the sale of (Hemp Foods Australia), it became apparent that Elixinol could benefit from Shunho’s extensive experience and reputation in Greater China,” Stratos Karousos, Elixinol Group’s CEO, said in a statement.

The executive said the firm plans to leverage Shunho’s experience in hemp cultivation and distribution across Asia to help follow through with its global strategy.

The Nunyara business was founded in 2014 with the goal of entering the Australian medical cannabis market, and slashing it from its roster will cost Elixinol AU$4.8 million in a non-cash impairment fee.

Nunyara was granted a licence for the production of medicinal cannabis for extracts and tinctures of cannabis and cannabis resin back in July 2019. At the time, the firm expected to obtain a full medicinal cannabis Llicence from the Australian Office of Drug Control.

The sale of the two subsidiaries comes after Elixinol discarded its majority stake in Elixinol Japan by selling it to Takeshi Sakurada, a fellow shareholder, in December.

The firm’s Japanese division was found to have sold non-compliant hemp-derived CBD products during a company-wide review of its global operations.

Don’t forget to follow us @INN_Australia for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

  Life Science and Healthcare Investing in 2020 report cover

Coronavirus:An Overview for Investors

 
COVID-19 continues to impact world markets. Get INN’s overview of coronavirus investing.
 

Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (NASDAQ: CGC) will release its financial results for the third quarter fiscal 2021 ended December 31, 2020 before financial markets open on February 9, 2021.

Keep reading... Show less

NYSE | TSX: ACB

Aurora Cannabis Inc. (the “Company” or “Aurora”) (NYSE: ACB) (TSX: ACB), the Canadian company defining the future of cannabinoids worldwide, announced today the closing of its previously announced bought deal public offering (the “Offering”) of units of the Company (the “Units”) for total gross proceeds of US$137,940,000 . The Company sold 13,200,000 Units at a price of US$10.45 per Unit, including 1,200,000 Units sold pursuant to the exercise in full of the underwriters’ over-allotment option.

Keep reading... Show less

Aurora Cannabis Inc. (the “Company” or “Aurora”) (NYSE | TSX: ACB), the Canadian company defining the future of cannabinoids worldwide, announced today the closing of its previously announced bought deal public offering (the “Offering”) of units of the Company (the “Units”) for total gross proceeds of US$137,940,000. The Company sold 13,200,000 Units at a price of US$10.45 per Unit, including 1,200,000 Units sold pursuant to the exercise in full of the underwriters’ over-allotment option.

Each Unit is comprised of one common share of the Company (a “Common Share”) and one half of one common share purchase warrant of the Company (each full common share purchase warrant, a “Warrant”). Each Warrant is exercisable to acquire one common share of the Company (a “Warrant Share”) for a period of 36 months following the closing date of the Offering at an exercise price of US$12.60 per Warrant Share, subject to adjustment in certain events.

Keep reading... Show less

AMP German Cannabis Group Inc. (” AMP “) (CSE: XCX ), ( Frankfurt : C4T ) (ISIN: CA00176G1028) and Aphria Inc.’s (” Aphria “) (TSX: APHA ) (NASDAQ: APHA) wholly-owned German subsidiary, CC Pharma GmbH (” CC Pharma “), have entered into a strategic agreement (the ” Co-Promotion Agreement “) covering joint marketing of sales for Aphria brand medical cannabis products for the German market.

The Co-Promotion Agreement is a collaboration contract between AMP and CC Pharma to sell the Aphria medical cannabis brand in Germany . In addition, AMP will organize with the support of CC Pharma, “information events” in Germany to market Aphria branded products to doctors and pharmacists.

Keep reading... Show less

HempFusion Wellness Inc. ( TSX:CBD.U ) ( FWB:8OO ) (“ HempFusion ” or the “ Company ”) is pleased to announce that it has been included in two leading cannabis & hemp-derived CBD focused exchange-traded funds (“ ETFs ”), AdvisorShares Pure US Cannabis ETF ( NYSE:MSOS ) and AdvisorShares Pure Cannabis ETF ( NYSE:YOLO ).

AdvisorShares is a leading sponsor of actively managed ETFs. Pure US Cannabis ETF (MSOS) is the only US-listed ETF dedicated solely to US cannabis exposure, with over US$616,000,000 in assets under management (“ AUM ”). Pure Cannabis ETF (YOLO) was the first US-based actively managed ETF focused on the global cannabis industry. YOLO and MSOS endeavor to achieve long-term capital growth by investing in some of the largest foreign and domestic cannabis and hemp-derived CBD companies. The two AdvisorShares ETFs have a combined AUM of over US$880,000,000 as of January 22, 2021.

Keep reading... Show less