Hemp Stock: Elixinol USA Shows Big Upside Potential For a Low Price

hemp stock

Since the US updated the Farm Bill—legalizing industrial hemp farming—hemp stocks have been on investors minds everywhere.

It's no surprise. The new legislation allows the CBD (cannabidiol) market to bloom. This market is expected to be worth $1.2 billion USD by 2020 with hemp-derived CBD accounting for approximately $646 million of that. (Well, that's what the estimations tell us).

With this potential at investors' fingertips, let's look at Australia's Elixinol Global (OTCQX:ELLXF), which has a rather sizeable and potential lucrative US-based side to its business. This is hard to ignore in this burgeoning hemp market.

Hemp Stock: Elixinol Global (OTCQX:ELLXF)

The Australian company splits its operations into three businesses. They are Elixinol Australia, Elixinol USA, and Hemp Foods Australia. 

The real jewel in the crown here is Elixinol USA. This US-facing hemp-derived CBD arm accounts for 85% of Elixinol Global's entire revenue.

ELLXF Stock Moves

This hemp stock is currently selling for $2.53, up 0.90% on the day. For the low price tag, the upside potential here is big. With demand growing for its direct-to-consumer sales and steady wholesale and bulk sales of CBD, USA margins are expanding.

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Growth Strategy

Another reason to consider this hemp stock is its international growth strategy in Europe and New Zealand. New Zealand recently changed its law allowing CBD with low-levels of THC to be used as a prescription medicine. Soon after, Elixinol put out a press release:

"Leading global hemp CBD company Elixinol has announced its entry into the New Zealand marketplace, offering its comprehensive range of cannabidiol ('CBD') products [...] [the company] has launched in New Zealand following the December 2018 passage of New Zealand's Misuse of Drugs (Medicinal Cannabis) Amendment Act."

The possibility of an international CBD business puts the ELLXF hemp stock in a position to return serious upside. Though the business may not be as well-known as some of its peers, this hemp stock is trading at a very reasonable entry-price.

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