Isodiol International Inc. (CSE:ISOL) (OTCQB:ISOLF) released its most recent fiscal Q3 2019 results earlier today. Despite reporting “revenue in excess of $7.1 million USD,” ISOL stock is currently down a significant 8.23% on the CSE.
What’s going on with this hemp stock?
Isodiol International Q3 Results
The Isodiol Q3 results cover the third quarter period ended December 31st, 2018. As the press release states, Isodiol’s “consolidated operations generated more than $7.1 million in revenue with a gross profit exceeding $3.6 million.”
Looking at those results, some would consider that Isodiol ended 2018 on a high. The fruits of this industry are yet to come because the updated US Farm Bill has only been signed in December. As a hemp producer, Isodiol is in a primed position to be a leader in this industry.
So with that in mind, it’s hard to understand the negative reaction to today’s press release.
Consumer Packaged Goods
The company says it’s shifting its focus to building its portfolio of consumer packaged goods (CPG). This suggests more lines of topical CBD products or CBD-infused consumables perhaps.
Kevin Swadish, Isodiol’s Chief Revenue Officer, said the following:
“The legalities of hemp-based CBD are becoming more favorable, and consumer awareness of CBD is rapidly rising […] As a result, we believe the greatest growth opportunities in the industry, and for Isodiol, lie in the consumer packaged goods marketplace. Fortunately, we are poised to execute on these expanding opportunities in ways that the majority of our peers are not.”
By building a portfolio of CPGs, management wants to enhance “its bulk offerings of CBD with value-added offerings to increase gross profit margins.” It sounds like a promising step forward in an industry that has a high demand for hemp-derived CBD products. So why aren’t investors biting?
Perhaps “shifting focus” isn’t encouraging for some. After all, what does that really mean?
Isodiol describes itself as “a product development, sales, marketing, and distribution company of hemp-based Consumer Packaged Goods (CPG) and solutions.”
The company focuses on the nutritional health benefits derived from hemp. It has commercialized a 99%+ nano-technology-infused CBD isolate. Purported to be in its most potent form for bodily absorption, this isolate is Isodiol’s flagship product used in topical creams and consumables.
All I can gather is the company wants to increase its product line and investors aren’t happy with the profit margins.
Is there something I am missing here? What do you think about the Isodiol Q3 results? Are you a fan of this hemp stock?
Featured Image: DepositPhotos © EdZbarzhyvetsky