The Elixinol Ltd (ASX: EXL) share price has fallen 2% this morning as investors had a mixed reaction to the company's March 2019 quarterly results.
What did Elixinol announce this morning?
Elixinol reported Q1 2019 group revenue of $8.2 million, representing a 21% increase on the prior corresponding period (pcp) and a 31% quarter-on-quarter (QoQ) decline.
Management attributed the QoQ decline to the company's decision to reduce the focus on low margin private label business in the US to enable increased capacity for the expected growth of higher margin branded products and provide the ability to capture further market share.
Elixinol reported a strong financial position and a healthy balance sheet with $27.4 million in cash as at quarter end with US retail broker Presence Marketing appointed to help it reach into more than 15,000 retail stores.
The company's regional highlights included the commencement of US national distribution sales beginning Q2 2019 following an initial order for 13 Elixinol branded CBD topical and dietary supplement products from a large 'bricks and mortar' national retailer initially across 330 stores with expectations of a rollout to more than 1,000 stores.
The industrial hemp and emerging medicinal cannabis company also reached a European promotional partnership agreement with Cambrian Alliance Group (UK) and received a purchase order for distribution in a popular UK high-end retailer among other ongoing conversations.
What's been happening to the Elixinol share price?
The Elixinol share price has rocketed 85.5% so far this year to $4.99 per share amid solid earnings and strong growth prospects for the company and sector as a whole.
With a market cap of $621.5 million, Elixinol is no small player in the growing cannabis sector despite this morning's early volatility.
Since January 2018, the company's share price has nearly trebled in what has been a real outperformer on the ASX in recent times.
I'm reasonably bullish on the stock in the long-term despite the potential regulatory headwinds and I would expect the stock to soar higher if a Labor government is elected in the May Federal Election.
For those who want to look at other options within the hemp and cannabis sector, this top-rated stock could be another great option for Fools looking to improve portfolio gains in 2019.
