CBD maker Elixinol Global Limited said it is hitting the reset button in 2020 after a series of developments that beset the company during 2019. As a global downturn in the fortunes of CBD has slammed players big and small, publicly-traded Elixinol has seen its share price, which reached a high of $4.20 in April 2019, plummet to around $0.40 in recent trading. Elixinol debuted on the Australian Stock Exchange in June 2018.
In a recent market update, Elixinol said it will simplify its business model “to focus on the hemp derived CBD market,” intimating it will be looking to shed its Hemp Foods Australia unit as well as Nunyara, which had ambitions in the medical marijuana sector.
Meanwhile, the company said it will “refresh” the Elixinol CBD brand while slimming down its product line. “Previously, Elixinol’s go to market strategy has been too broad and confusing to the consumer,” the company said, noting the “brand and product refresh is more targeted at the key consumer areas of the retail industry.”
Stratos Karousos, installed as CEO last summer, said the company will focus on the U.S., UK and other European markets where it has infrastructure and production capacity.
While being swept up in the general sector downturn, Elixinol underwent significant change in 2019.
Founder Paul Benhaim was reassigned from CEO to Chief Innovation Officer in July before resigning from management of the company in December. Benhaim was the founder of both Elixinol and subsidiary Hemp Foods Australia.
The company also was forced to essentially withdraw from the Japanese market due to non-compliance issues based on Japanese law, which requires any hemp products sold to be derived only from the seed and/or stalk of the hemp plant. Elixinol announced in early December it was selling its 50.5% interest in Elixinol Japan to partner Takeshi Sakurada, recording a $2.2 million loss on the transaction; the company said it intends in the future to operate under a licensing arrangement in Japan.
Finally, Elixinol notified shareholders in December it could be subjected to a class action lawsuit in the U.S. regarding the labeling of its products as dietary supplements. That litigation could also ensnare U.S. CBD makers Charlotte’s Web and Infinite Products Co., Elixinol noted in a Dec. 5 statement.