Elixinol Global Ltd. launches today on the Australian Securities Exchange (ASX) just as national legislation is opening export possibilities for medical cannabis.
Elixinol already has operations based in Denver, Colorado, USA, where it makes and distributes hemp-based CBD, nutraceuticals, food supplements and skincare products. The company raised $20 million via an initial public offering of shares at AU$1.00 each (US$0.79).
Benhaim: ‘Future brighter’
“The future for medical cannabis is looking brighter than it has,” Elixinol CEO Paul Benhaim told Australia’s ABC television last week. “With exports opening up we now have access to a growing market that may be worth AU$40 billion (US$30 billion) very shortly,” Benhaim added, noting the government is giving the Australian medical cannabis industry “a chance to catch up” on the global market.
The Australian government last week announced plans to set an export scheme for medicinal cannabis; the government also noted growing demand domestically. Australia legalized patient access to Australian-grown and manufactured medicinal cannabis in 2016.
Elixinol Global Ltd. is well-positioned to leverage not only the expertise from its U.S. production operations but also a distribution network which embraces Asia, South America, Africa, the United States and Europe, where it began distribution operations last year.
A University of Sydney estimate puts cannabis production in Australia at about AU$100 million (US$78 million). By comparison, the Canadian market is worth CA$4 billion ($3.19 billion), the University estimated. Globally, some projections have the market for medicinal cannabis reaching about US$56 billion over the next 5-7 years.
“Our goal is very clear: to give farmers and producers the best shot at being the world’s number one exporter of medicinal cannabis,” Australian Health Minister Greg Hunt said last week of the export legislation.
Meet domestic demand first
Under the new export legislation growers are required to first meet demand from local patients before selling abroad. “By helping the domestic manufacturers to expand, this, in turn, helps to ensure an ongoing supply of medicinal cannabis products here in Australia,” Hunt said.
Victoria became Australia’s first state to legalize cannabis for medical use and was quickly followed by New South Wales. South Australia is creating an Office of Medicinal Cannabis and Industrial Hemp in support of the industries.
Australia joins Uruguay, Canada and Holland in establishing medicinal cannabis exports, with Israel expected to approve exporting soon.
Elixinol Global Limited is trading under the ASX symbol EXL.