Retail sales were flat overall in the month of April, following very small increases in March and February.

The bottom line is that retail sales are slowing in 2023, as the impact of rising inflation and interest rates starts to flow through the economy.

ABS head of retail statistics Ben Dorber said:

Retail turnover has plateaued over the last six months as consumers spent less on discretionary goods in response to cost-of-living pressures and rising interest rates.

Spending was again soft in April but was boosted by increased spending on winter clothing in response to cooler and wetter than average weather across the country.

What does weaker spending mean for ASX retail shares?

Household consumption is worth about 50% of Australia's gross domestic product (GDP), so that's why retail sales are an important yardstick for our economic health.

The data also provides insight into the categories of retail that are receiving more of our dollars.

According to today's figures, only two categories recorded higher spending in April. They were clothing, footwear, and personal accessories (up 1.9%) and department stores (up 1.5%).

Household goods spending declined by 1% — its third consecutive monthly fall.

We also saw the first fall in food spending following 13 months of increases. Spending at cafes and takeaway outlets fell by 0.2%, and general food shopping declined by 0.1%.

On the market today, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is among six out of 11 market sectors on the rise, up 0.33%. Meantime the S&P/ASX 200 Index (ASX: XJO) is up 0.07%.

Here are the risers and fallers among ASX retail shares on Friday, and how they're trending year to date (YTD).

Rising retail shares on Friday

Some of the top risers among ASX retail shares today are:

• The Dusk Group Ltd (ASX: DSK) share price is up 3.3% to $1.10, but down 41% YTD
• The Domino's Pizza Enterprises Ltd (ASX: DMP) share price is up 3.2% to $47.16, but down 29% YTD
• The Lovisa Holdings Ltd (ASX: LOV) share price is up 1.4% to $21.37, but down 7% YTD
• The Adairs Ltd (ASX: ADH) share price is up 2.4% to $1.91, but down 16% YTD

Falling retail shares on Friday

Some of the fastest fallers among ASX retail shares today are:

• The Universal Store Holdings Ltd (ASX: UNI) share price is down 5.1% to $2.98, and down 43% YTD
• The City Chic Collective Ltd (ASX: CCX) share price is down 5% to 38 cents, and down 17% YTD
• The Mosaic Brands Ltd (ASX: MOZ) share price is down 5.3% to 18 cents, and down 36% YTD
• The Mighty Craft Ltd (ASX: MCL) share price is down 5% to 9.5 cents, and down 47% YTD

Hitting 52-week lows today

The ASX retail shares hitting 52-week lows today include Mighty Craft shares, which dipped to 9.3 cents in earlier trade, Redbubble Ltd (ASX: RBL) shares at 38 cents, and Elixinol Wellness Ltd (ASX: EXL) shares at 1.4 cents.

The post Soft spending: How ASX retail shares are responding to a weak month appeared first on The Motley Fool Australia.

But some sectors inevitably performed better than others. That's capitalism for you. And the sector we're looking at today – ASX cannabis shares – certainly had its fair share of both winners and losers.

So let's check out how this popular sector fared in the financial year that has just passed us by.

How did the top ASX cannabis shares fare in FY21?

Below is a table of how the ASX's top cannabis shares performed in FY2021:

As you can see, it was something of a mixed bag. If you were lucky enough to hold Creso Pharma shares over the financial year, you would have enjoyed a very pleasing gain of more than 350%. However, if you were unfortunate enough to have money invested in Ecofibre, you instead would have had to cop a nasty near-70% loss for your time, effort and capital.

Highs or red eyes for ASX cannabis?

While each company had its own individual trials, triumphs and tribulations, it's worth noting this is a sector that often moves in tandem. This is due to the unique but uniform challenges ASX cannabis shares all face. The most prominent of these is, of course, the legal status of cannabis itself.

Whilst recreational use of cannabis/marijuana is still illegal in many countries, including Australia, recent changes have been happening.

Perhaps at the forefront of these changes is the ever-evolving regulatory landscape in the United States. As it currently stands, 18 US states currently allow recreational use of cannabis.

Most recently, we saw the state of New York 'legalise it' back in April. This saw an immediate boost to the values of ASX cannabis shares despite the Australian market implications being limited.There is also debate in Mexico over the potential legalisation of cannabis. If this went ahead, it could open up a market of nearly 130 million people.

Another headache…

On the other hand, ASX cannabis shares have seen some setbacks in this arena as well. Last October, New Zealand held a 'reefer-rendum' on legalising recreational use of cannabis across the ditch. It failed, meaning that, at least for now, recreational use of cannabis remains illegal in the Land of the Long White Cloud. This was a big setback for the ASX cannabis sector here in Australia.

But, as you may have noted, there were some clear winners in this space regardless. As we noted earlier, Creso Pharma was the top performer in its sector.

Creso managed to capture investor attention through its acquisition of Halucenex Life Sciences. Halucenex specialises in psychedelic compounds and stands to benefit if the US state of California legalises psilocybin (the active drug in 'magic mushrooms'). This is still currently being debated in the Californian Congress but investors certainly seem optimistic.

It's also worth noting that some of the worst-performing ASX cannabis shares of FY21 were once known as some of the best performers.

Companies like Althea and Xalra were top-performing companies as recently as last year. But the tide has definitely turned for some of these companies' share prices. Mostly, complications surrounding the pandemic, as well as regulatory issues, are mostly to blame here for the woes of Ecofibre and Cann Group in particular.

The post Blazing it? How the top ASX cannabis shares performed in FY21 appeared first on The Motley Fool Australia.

At the time of writing, the Elixinol share price is up 5.88% to 18 cents per share.

Elixinol's focus is the manufacture and distribution of industrial hemp products and early-stage medical cannabis business focusing on the importation, cultivation, manufacture and distribution of CBD and THC products (using the active compounds in marijuana). 

Elixinol's quarterly business update

Elixinol's focus in its latest update was its "highly value-accretive" acquisition of leading German hemp-derived CBD player, CannaCare Health. According to the company the acquisition will deliver fast market entry and immediate, material scale in Europe's fastest growing CBD market.

Elixinol also highlighted its financial position, stating it was "well-funded", with $23.3 million in cash and equivalents to support acquisitive growth and sustain conditions in those markets — particularly its European ambitions — that are still COVID-affected.

In terms of sales, Elixinol reported a first-quarter FY2021 revenue of $2.3 million, which was a 26% decline on the previous quarter. In that period the company made $3.1 million.

In some good regulatory news for Elixinol, its products are now supported by a valid novel food application under the UK Food Standards Agency (FSA), which could lead to greater sales revenue in the future.

It's predicting growth in that market over the coming months, as the UK re-emerges from lockdown and Elixinol retailers begin to restock their orders.

What Elixinol management said

Elixinol Global CEO, Oliver Horn, said the company had struggled due to the coronavirus pandemic.

The first quarter of the calendar year is traditionally softer for retail, while consumers curb discretionary spend after Christmas and holiday trading periods. This seasonal trend was compounded by the continued impact of COVID in two of our key markets: the UK and US, where footfall into physical venues continued to be significantly reduced.

Pleasingly, in March we saw green shoots start to appear both in the UK and the US as the impact of economic stimulus packages, easing of COVID restrictions came into effect and increased vaccination rates started lifting consumer confidence.

Elixinol share price snapshot

The Elixinol share price has been a relatively steady faller since a very short-lived high of 47 cents a share in May 2020. Since then it's risen above 25 cents in December 2020 and February 2021, but has spent most of its time below the 20 cent mark.

It's now level with the start of 2021, but has lost 45% over the past 12 months. 

The post Elixinol (ASX:EXL) share price heats up on cannabis business update appeared first on The Motley Fool Australia.

Take Creso Pharma Ltd (ASX: CPH). It's up 1% to 20 cents a share. Or Cann Group Ltd (ASX: CAN), up 0.54% to 54 cents a share. Elixinol Global Ltd (ASX: EXL)? It's up 5.56% to 19 cents a share. Althea Group Holdings Ltd (ASX: AGH) is up 1% at 50 cents.

What gives?

Well, there's a piece of news out today that might be getting investors keen to light up on cannabis shares.

According to the Governor of the US state of New York's office, Governor Andrew Cuomo has just signed a bill into law that has legalised recreational use of cannabis in the state of New York.

As we flagged a few days ago, New York now joins 14 other US states that have already legalised recreational use. The new New York law will allow the state to issue licenses for dispensary businesses to sell marijuana to adults aged 21 and over legally.

Further, outside-of-home possession of marijuana is now legal to a limit of 3 ounces. It will also allow adults aged over 21 to grow 3 mature and 3 immature plants each (with a limit of 6 mature and 6 immature plants per household).

The governor expects that the new law will raise approximately US$350 million in new taxes annually, as well as create between 30,000 and 60,000 new jobs across the state.

How will this affect ASX cannabis shares?

Well, this is something of a hollow victory for the ASX cannabis sector. What happens in the United States, of course, has no direct implications for Australia's cannabis industry. Recreational cannabis remains illegal in every Australian state and territory, although laws differ when it comes to decriminalisation. Medicinal use is more prevalent, but again, it's still early stages.

Even so, proponents of wider cannabis legality would no doubt still be heartened. Over in the US, we have seen a 'domino effect' with legalised cannabis. 15 states now allow recreational marijuana, but it was only back in 2012 that the first two US states (Colorado and Washington) legalised recreational use. A further 36 US states allow medicinal use as of today.

Arguably the more states and countries follow in New York's path, the better the prospects here for ASX cannabis shares.

The post Here's why ASX cannabis shares are lighting up today appeared first on The Motley Fool Australia.

This comes after the ASX hemp company revealed it would acquire a leading German cannabidiol (CBD) company.

Elixinol shares were placed in a trading halt on 4 March at the company's request, pending this announcement. Shares started trading on the ASX again this morning.

What did Elixinol report on its acquisition agreement?

The Elixinol share price is moving higher after the company reported it would acquire CannaCare Health GmbH.

CannaCare owns CANOBO, which is among Germany's top CBD brands with a dominant position in Germany's drugstores. CANOBO has more than 4,500 physical retail distribution points, and its 20 products include CBD oils, sprays and skincare.

In the 2020 financial year, CannaCare reported 2.6 million euros (AU$4 million) in revenue with earnings before interest, taxes, depreciation and amortisation (EBITDA) breaking even.

Elixinol noted that Germany's CBD market was expected to grow faster than any other in Europe. The compound annual growth rate (CAGR) of 47% or more is forecast to reach US$600 million by 2025.

The agreement stipulates Elixinol will pay 9 million euros upfront, with 3 million euros in cash and the other 6 million euros in Elixinol shares.

The company reported that "upon attainment of FY2021 revenues of 12.9 million euros and 20% EBITDA, the maximum earn-out of 15.0 million euros is payable in Elixinol shares, making a total potential consideration of 24.0 million".

Management commentary

Commenting on the binding agreement, Elixinol global CEO Oliver Horn said:

We are incredibly excited about this transformational opportunity which leapfrogs Elixinol closer to its vision of becoming a profitable, global, hemp-derived consumer goods wellness business…

By acquiring CannaCare, we gain a strong foothold in Europe's fastest growth market of Germany and, together with our established UK business, will become a leading pan-European business of scale.

Completion of the agreement remains subject to all the standard conditions.

Elixinol share price snapshot

Over the past 12 months, Elixinol shares are down 18%. That compares to a 38% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date, the Elixinol share price is up 14%.

The post Why ASX hemp share Elixinol's (ASX:EXL) share price is moving higher appeared first on The Motley Fool Australia.

Shares in the small-cap cannabis company have not been trading since the start of today. Consequently, the Elixinol share price remains at 19.5 cents.

What happened to Elixinol

The Elixinol share price will be one to watch in the coming days as its shares begin trading again. According to the release, the trading halt will remain in place until the announcement. Alternatively, when trading commences on March 8. Whatever is earlier.

The potential transaction is yet to be announced. Elixinol has stated that it wasn't aware of any reason why the halt should not be granted. 

Full year results

Notably, the company recently released its full-year results on February 26. Its shares have since nosedived, shedding around 9%.

While much of the past 12 months has been challenging for traditional retailers, we made great strides forward in our pursuit of sustainable growth and improved capital efficiency. Our strategy to reduce our cost base and shift the business towards higher margin channels, while bringing new products to market and entering new categories, is starting to show success via an improving bottom-line.

The post Why the Elixinol (ASX:EXL) share price has been halted today? appeared first on The Motley Fool Australia.

Take Cann Group Ltd (ASX: CAN). CAN shares are getting smoked with a  2.34% loss at the time of writing to 62 cents a share. Althea Group Holdings Ltd (ASX: AGH) is fairing even worse, down 4.17% to 46 cents. Elixinol Global Ltd (ASX: EXL) is down 1.58% to 19 cents a share, and Ecofibre Ltd (ASX: EOF) is down 3.75% to $1.8 a share.

So why are ASX cannabis investors getting red eyes today?

ASX cannabis shares wake up with a hangover

It's worth noting that the entire ASX cannabis sector has had an excellent run over the last 2 months or so. Althea blazed almost 40% higher between 3 November and 3 December last year. Cann Group was up more than 100% over a similar period.

The catalyst for that move appears to be the victory of President Joe Biden in November's US presidential election. President Biden's Democratic Party is far more supportive of cannabis legalisation in the US. This contrasts the stance of former president Donald Trump's Republican Party. 

Although a significant and growing number of US states have legalised recreational cannabis, it remains illegal at the federal level. Expectations that the US government will move to lift federal restrictions have been… er, high, since Biden won office.

This month saw Democrats also win control of the US Senate which would have only added to these expectations. However, recent political machinations across the Pacific have dented hopes that this will amount to big legislative changes from Congress.

According to a recent reporting in The Washington Post, Democrats are now fearing that the Republican minority in the US Senate is gearing up to be as obstructionist as possible. That doesn't bode well for federal cannabis legalisation, given the presence of the infamous filibuster rules of the Senate.

So perhaps today's moves come down to investors looking for an excuse to take profits off the table after some incredible runs. High growth shares tend to sell off at a more enthusiastic pace than the broader market when the ASX is having a bad day.

The post Up in smoke! Why ASX cannabis shares are having a bleary day appeared first on The Motley Fool Australia.

Four shares that have fallen more than most today are listed below. Here's why they are dropping lower:

Elixinol Global Ltd (ASX: EXL)

The Elixinol Global share price is down 12% to 18.5 cents following the release of a business update. That update revealed that its agreement with Pet Releaf has been terminated. Elixinol and Pet Releaf have been in a manufacturing and supply arrangement since August 2019. However, with the agreement not making a material contribution to its operations, management decided to pull the plug.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down 2.5% to $15.49. This appears to have been driven by concerns over the outbreak of COVID-19 in New South Wales. With border restrictions now being put in place, it has the potential to delay the recovery in the domestic travel market. This could extend the cash burn being experienced by travel companies.

Mesoblast limited (ASX: MSB)

The Mesoblast share price is down a further 4% to $2.31. Investors were selling this biotech company's shares last week after the release of a couple of disappointing updates. So much so, the Mesoblast share price crashed 47.5% lower over the period. Both its advanced chronic heart failure and COVID-19 Acute Respiratory Distress Syndrome trials failed to achieve their primary endpoints.

WiseTech Global Ltd (ASX: WTC)

The WiseTech share price has dropped 9% to $29.91. Investors have been selling the logistics solutions company's shares after it hit back at a short seller attack. Viceroy Research claims that of the 37 acquisitions made by WiseTech over the past four years, many are from distressed sales or bankrupt companies with revenues falling post-acquisition. WiseTech has refuted these claims.

The post Why Elixinol Global, Flight Centre, Mesoblast, & WiseTech shares are dropping lower appeared first on The Motley Fool Australia.

At this share price, Elixinol is just 4 cents away from its all-time low of 14 cents a share, and a whopping 87% from its 52-week high. Since the start of 2020 alone, the company's shares are down 63%.

So what's going on here for the hemp products producer?

Why the Elixinol share price is going up in smoke

Today's share price plunge appears to be connected to an ASX market announcement the company made this morning before market open. In this announcement, Elixinol told investors that an agreement it has with another company by the name of Pet Releaf has been terminated.

Elixinol and Pet Releaf have been in a manufacturing and supply arrangement since August 2019. Under this agreement, the two companies would be "long-term partners".

But according to Elixinol:

The contributions from the Agreement have not been material to Elixinol Global's operations and given the global COVID-19 pandemic has created challenging trading conditions for the industry, the parties agreed to formally terminate the Agreement on 18 December 2020 [US Pacific Standard Time] with a mutual release.

A contributing factor to this breakdown was also a shift in focus for Elixinol. The company stated that:

Elixinol entered into the Agreement with a strategic view at that time of Pet Releaf being a long-term partner of Elixinol. Since that time, Elixinol Global has revised its commercial strategy by focusing on the distribution of higher margin Elixinol-branded products, rather than supporting private labelled products to which the Agreement relates.

However, Elixinol assured investors it will continue to "focus on the strong relationship with Pet Releaf". It notes that Elixinol still maintains a 25% equity interest in Pet Releaf. It stated, "the Company continues to look forward to supporting Pet Releaf's strategic focus on increased product offerings and distribution of high quality hemp-derived CBD pet products in the market".

Investors light up SPP

Elixinol has also made a separate announcement to the ASX today regarding its recent share purchase plan (SPP). Last week, Elixinol told investors its SPP had been heavily oversubscribed. Applications totalled $27.2 million, well over the initial $2 million expected. As a result, the company expanded the SPP size by an additional $12.3 million.

Today's announcement confirms management's belief that the company is well capitalised as a result of the SPP. But the "strong third quarter" the company has recently had will not be spilling over. Elixinol included some remarks from its chief executive officer Mark Horn on the matter:

The fourth quarter certainly is not the quarter that we expected to have… simply because COVID has had a significant impact on our businesses in the UK and Europe. We had more head winds than we expected, so I certainly see that the Q4 quarter is for us one of the more challenging ones compared to the previous quarter. But the reality is that we are really well positioned given that we are a wellness product with great distribution and new growth catalysts.

The post Why the Elixinol Global (ASX:EXL) share price is getting smoked today appeared first on The Motley Fool Australia.

The Australian Securities and Investments Commission (ASIC) announced Thursday that it had reviewed financial reports for the year ending 30 June 2020 for 170 listed companies.

This resulted in the regulator contacting 27 companies regarding 58 different matters to demand a 'please explain'.

Issues around disclosures about the effect of COVID-19 dominated this year's enquiries.

"Many companies made useful and meaningful disclosures on the impact of COVID-19 conditions. However, some entities with businesses adversely affected by the pandemic did not appear to give sufficient attention to the reporting of asset values and financial position," stated ASIC.

The commission also enquired when it thought the company "made unrealistic and unsupportable assumptions about future cash flows".

Four of the 27 companies have been let off so far, while investigations into the other 23 are continuing.

$60 million of profit wiped from 4 companies

An ASX company is sometimes compelled to amend its reported numbers after an ASIC enquiry.

This has already happened to Nitro Software Ltd (ASX: NTO), Kresta Holdings Ltd (ASX: KRS), Elixinol Global Ltd (ASX: EXL) and Lawfinance Ltd (ASX: LAW) for their 30 June 2020 reports.

Collectively $60 million of profit was wiped from these companies due to the corrections.

ASIC did acknowledge that the coronavirus pandemic would have forced many companies to use "probability-weighted scenarios" to come up with their figures.

A simple disclosure of assumptions in the financial report would have covered this, according to the commission.

Listed companies need to improve to keep investors sufficiently informed.

"Our findings emphasise that directors and auditors need to focus on impairment of non-financial assets given the extended impact of the COVID-19 pandemic, to ensure that the market is properly informed about asset values and the expected future performance implied by those values," stated ASIC.

ASIC had previously warned that directors are "primarily responsible" for the quality of the company's financial report. 

"Companies should apply appropriate experience and expertise, particularly in more difficult and complex areas of accounting policies and estimates."

The post 27 ASX companies just got an unwanted knock on the door appeared first on The Motley Fool Australia.

The EXL share price lost 7.6% to 24 cents in after lunch trade when the S&P/ASX 200 Index (Index:^AXJO) gained 0.5%.

Other ASX medicinal cannabis stocks are faring better. The Creso Pharma Ltd (ASX: CPH) share price gained 10.3% to 11 cents and the Auscann Group Holdings Ltd (ASX: AC8) share price stayed flat at 17 cents at the time of writing.

Elixinol share price well above offer price

But Elixinol shareholders may not be too perturbed as the stock is still up 33% since the company emerged from a trading halt.

The trading halt was called as management undertook an $8.2 million placement and launched a SPP to raise another $2 million.

Management said today that its SPP has secured $1.3 million ahead of the 11 December closing date for the SPP.

Unusual SPP update

It's quite unusual for management to issue an update to the SPP, but I take it that management is very eager to get the cash.

This was evident as the ASX statement "strongly encourages" shareholders who haven't put in their applications to do so before next week's deadline.

The fact is, there is no incentive for shareholders to lock in bids for the raise so far out from the SPP closing date.

Why it's better to wait

Between now and then, the Elixinol share price could drop below the offer price of 17 cents a share. If that were to happen, it would be cheaper for shareholders to purchase shares on market instead.

If management really wanted shareholders to consider applying to the SPP earlier instead of later, it would have offered a discount to the five-day volume weighed average price (VWAP).

This means SPP applicants will either pay 17 cents or the small discount to the VWAP, whichever is lower.

Foolish takeaway

The update also worked against the company, in my view. Shareholders now know they are likely to get their full allocation.

If they thought that there is a good chance they will be scaled back (meaning they only get part of what they applied for), shareholders may be tempted to apply for more than what they really wanted.

Of course, there could be a late surge in applications as there normally is to such programs, but today's update puts the oversubscription theory in doubt.

Sometimes more is less.

The post Elixinol (ASX:EXL) share price tumbles on capital raising update appeared first on The Motley Fool Australia.

The Elixinol share price went flying as a result, gaining 43.24% today. This takes shares in the company up to a price of 26 cents.

What happened

Today it was announced that the UN has officially rescheduled cannabis, after the UN's Commission on Narcotic Drugs (CND) voted to accept the World Health Organization's recommendation.

Moreover, the vote acknowledged the medicinal usefulness of cannabis and clarified that cannabidiol (CBD) is not under international drug control.

What now for Elixinol 

As the company noted, the news is expected to have a substantial impact on Elixinol's ability to drive product sales in Europe and other countries influenced by UN decision-making.

Nonetheless, it is just the latest signal in the global relaxation of regulations surrounding CBD. It follows last week's landmark ruling from the EU's highest court that CBD "does not appear to have any psychotropic effect or any harmful effect on human health."

Management comment

Elixinol CEO Oliver Horn was understandably pleased with the news, saying:

This is possibly the most important day for cannabidiol – or CBD since it was scheduled as a narcotic in 1961. Since that time, substantial resource has been deployed into understanding CBD and while we have long understood its significant therapeutic value, international scheduling has held it back. This UN vote recognises CBD's potential, which we believe will positively impact Elixinol's ability to conduct business in our key regions. Over the last two years we've already built a substantial base in Europe which has contributed significantly to our recent performance and from which we can now unlock new value. Given the significant influence of the UN, we also expect positive follow-on effects into other countries where we operate.

Investors are clearly also seeing the upside, with the Elixinol share price soaring by more than 43%.

The post Why the Elixinol (ASX:EXL) share price popped 43% today appeared first on The Motley Fool Australia.

Who is Elixinol Global?

Elixinol Global is an ASX cannabis company with a portfolio of worldwide operations. Its Australian offerings are limited to its subsidiary, Hemp Foods Australia Pty Ltd. Hemp Foods Australia focuses on manufacturing and wholesaling hemp-based foods, materials and products. However, its global offerings are more extensive.

Elixinol makes and sells both hemp and cannabidiol (CBD) products across the United States, Latin America, Europe and the United Kingdom, as well as in Japan and South Africa. The legal status of CBD (a component of psychoactive cannabis, but not industrial hemp in meaningful amounts) varies around the world, which means that Elixinol can only sell these products in certain markets (which doesn't include Australia at this time).

Elixinol is a dual-listed company, appearing on the ASX, as well as on the Over-the-Counter (OTC) markets in the US. It only IPOed on the ASX back in January 2018, where it hit the boards at $1.57 a share. Looking at that price, it's not hard to conclude Elixinol has had a rough trot since then. The company did have a boom of sorts, rising from the IPO price to a high of $4.58 in May 2019. However, even after today's rise, Elixinol shares are down roughly 95.5% from those highs.

Why is the Elixinol share price surging today?

Elixinol shares are not the only ASX cannabis shares on the rise today. It looks as though we are seeing a sector-wide move, which indicates some macro or external factors at play. To illustrate, Elixinol's fellow ASX cannabis company Cann Group Ltd (ASX: CAN)'s shares are up 6.25% to 34 cents a share, whilst THC Global Group Ltd (ASX: THC) shares are up 7.14% to 22 cents and Althea Group Holdings Ltd (ASX: AGH) shares are up 14.81% to 46 cents.

The external factor could be that several US states legalised either recreational or medical cannabis use in last week's elections. According to our Fool colleagues across the Pacific, the states of New Jersey, Arizona, Montana and South Dakota look to have successfully voted to legalise recreational use, while the conservative state of Mississippi has legalised cannabis for medical use only.

Following these results, it means that 15 out of the 50 states in the USA have now legalised recreational use, with 35 permitting medical use as well. Being the world's largest economy, it's not hard to view these developments as good news for ASX cannabis companies, and by extension, any cannabis company around the world.

An impressive quarterly update

However, the Elixinol share price is still vastly outperforming its peers in the cannabis space today. So what might explain this? Well, last week, the company posted a quarterly update to the markets, which might have gone unnoticed until today amidst the election drama.

In this update (covering the quarter ending 30 September), Elixinol told the markets that its quarterly revenue had grown by a hefty 18% compared with the previous quarter to $4 million. It also succeeded in slashing costs and cash outflow, which was at $3.5 million for the quarter, down from $6.2 million in the previous quarter, and down from $9 million in the quarter before that.

The post ASX stock of the day: Elixinol Global (ASX:EXL) shares blaze new highs appeared first on The Motley Fool Australia.

By the end of the day, Cann Group Ltd (ASX: CAN) led the falls, down 4.69% to 3.05 cents per share.

THC Global Group Ltd (ASX: THC) wasn't far behind with a 4.17% slide to 23 cents a share.

Elixinol Global Ltd (ASX: EXL) was also feeling the pain, down 3.33% to 14.5 cents per share.

And Althea Group Holdings Ltd (ASX: AGH) was 2.27% lower at 43 cents a share.

So what was giving the market red eyes today in this space? Far from the, um, highs of a few years ago, today seems to be giving investors another ounce of regret.

NZ referendum induces investor paranoia

We can probably put today's negative moves in the cannabis sector down to the newly released results from the referendum that New Zealand held recently to legalise recreational cannabis use. The referendum was held at the same time as the New Zealand parliamentary elections a fortnight ago (in which the Labour Party's Jacinda Ardern won a landslide victory and a rare majority government), but results are only being released today.

According to reporting from the aptly-named Vice.com, the New Zealand cannabis referendum was not successful, with the preliminary count showing 53.5% opposing legalisation. The reporting suggests that unless late vote counting heavily favours the 'Yes' column, the prospects of legalised marijuana in New Zealand are up in smoke, at least for now. It doesn't look like there will be a purple haze of celebration across New Zealand tonight.

On a side note, a separate referendum to legalise voluntary euthanasia has been successful.

What does this mean for ASX cannabis shares?

Well, this isn't good news to be sure. A legalised market for recreational cannabis would have likely been a boon for companies like Cann Group and Althea Holdings. Not only would it have resulted in a potentially massive market just across the Tasman for cannabis products, but it would have also likely increased the pressure for Australian states to follow suit over the next few years. That prospect now looks a lot dimmer in light of this result.

And it's not as though ASX cannabis investors could have used some good news either. Cann Group shares are today more than 90% below where they were back in early 2018. As are THC Global shares (more than 75% down from early 2018) and Althea (down over 60% since July 2019).

It looks as though ASX cannabis investors will have to wait a little longer to turn their current headaches into new highs.

The post Here's why ASX cannabis shares are falling today appeared first on The Motley Fool Australia.

Elixinol operates in the hemp-derived, also known as cannabidiol or CBD, industry. The company's major businesses are located in Australia, Europe, the United Kingdom and the United States.

What's moving the Elixinol share price?

Investors were driving the Elixinol share price higher this morning despite the company reporting that revenues from continuing operations came in at $7.9 million for the six months to June 2020. This was a sharp 51% decline on revenues in the first half of FY 2019. The impact of the coronavirus pandemic was particularly hard for the company in the US retail market.

There has been a transition during the six month period to Elixinol branded products that have a much higher operating margin. The latter now constitute 64% of overall revenues, compared to only 50% in the prior corresponding half.

Operating expenses for Elixinol declined by 12% to $19.6 million for the six month period. Meanwhile, adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at $14.8 million compared to an EBITDA loss of $11 million in the prior corresponding period.

Elixinol ended 30 June with a relatively solid balance sheet. It had $16.8 million of cash and almost no debt on its books. The company also has a significant amount of existing inventory to support its growth strategy for more than a year.

Market outlook

While not providing any specific revenue guidance, Elixinol Global has highlighted some positive market trends already evident during FY 2021.

Executive Director and Group CEO, Oliver Horn, commented:

Post period, in July, we've seen the business improving across all divisions. All business units achieved internal EBITDA forecasts, demonstrating that revenue and cost have been well managed. 

With the European and UK business having secured extended distribution, an encouraging order book and launch of our new Elixinol Skin range, we are seeing a positive continuation of this trend in August. We have not yet realised full benefit from our cost reduction program – this will positively impact the business from H2 FY2020. 

Following its slight pull back, the Elixinol share price is now trading 3.1% up so far today. The company has had a challenging year to date with the Elixinol share price falling 67% in 2020. 

The post Elixinol share price edges higher on half year earnings release appeared first on The Motley Fool Australia.

Normally, most investors are locked out of investing in private companies because the shares aren't publicly traded on a market.

But an IPO 'democratises' a company by allowing it to be accessible for the first time to any investor with money to spare. Thus, it's always an exciting event with a lot of 'buzz' when a company goes public for the first time.

All listed companies underwent some kind of IPO in their history. This is the case whether relating to recent listings like Splitit Ltd (ASX: SPT) or those that occurred over a century ago, like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

Some big names that have IPOed on the ASX in the last 5 years include Splitit, as well as Viva Energy Group Ltd (ASX: VEA), Marley Spoon AG (ASX: MMM) and Elixinol Global Ltd (ASX: EXL).

Over in the United States, there are some bigger names you might have heard of that recently had IPOs. These include Uber Technologies Inc (NASDAQ: UBER), which floated just last year, along with Beyond Meat Inc (NASDAQ: BYND). These were very exciting events that generated a lot of investor interest.

Should you invest in IPOs?

Just because you can invest in something, it doesn't necessarily mean you should. Investors often get swept up in the hype of an IPO. But here's why I think investing in one usually isn't a good idea for the average investor.

When a company is private, it is subject to far less scrutiny than a public company. Even after a private company becomes public, it can sometimes take years for all of the company's skeletons to come out of the closet.

What's more, you don't get a chance to see how a company is actually weighed up by the market until after the IPO occurs. This can result in the shares being quickly re-valued.

Thus, a company can believe its own shares are worth $10 each and, as such, offers them at its IPO for $10. But if the market has a different opinion, you might find the shares trading at $7 or $5 each very quickly.

Boom, you've just lost 30% or more of your money on day one.

Foolish takeaway

In my experience, losing money on an IPO happens more often than not. Therefore, I generally think it's preferable to wait until after a company has floated to buy in. That way, you can ensure you are buying its shares at the market price, rather than at a price the company has concocted. Too often, IPOs are done to let old investors out, not to let new investors in. Thus, I think all investors should be very careful with IPOs and be sure to have a cold shower before jumping in.

The post Should you ever buy into an ASX IPO? appeared first on The Motley Fool Australia.

Four shares falling more than most today are listed below. Here's why they are dropping lower:

The Elixinol Global Ltd (ASX: EXL) share price has crashed 14% lower to 33 cents. This morning the cannabis company's shares returned from a trading halt after completing the institutional component of its entitlement offer. Elixinol raised approximately $5.3 million at a deep discount of 20 cents per new share. It will now attempt to raise a further $5.6 million via retail investors.

The National Storage REIT (ASX: NSR) share price has fallen 6% to $1.59 after completing its fully underwritten $300 million institutional placement. The storage giant raised the funds at a 7.1% discount of $1.57. These funds will be used to strengthen its balance sheet, replenish investment capacity and provide additional funding flexibility. The company will now seek to raise up to $30 million via a security purchase plan.

The Qantas Airways Limited (ASX: QAN) share price is down 3% to $3.51. This morning Credit Suisse responded to Qantas' latest market update by retaining its underperform rating and $2.20 price target. It has concerns that social distancing measures could impact seating on planes in the near term. It also suspects that Virgin Australia Holdings Limited (ASX: VAH) could return from administration as a stronger competitor.

The Vicinity Centres (ASX: VCX) share price is down 4% to $1.33. This follows the release of a trading update this morning. The shopping centre operator's update revealed that 50% of stores were open as of May 4. This represents 65% of portfolio gross lettable area. Positively, the company is well-placed to navigate the crisis. It has $1.3 billion of cash balances and undrawn facilities.

The post Why Elixinol Global, National Storage, Qantas, & Vicinity shares are dropping lower appeared first on The Motley Fool Australia.

In afternoon trade the cannabis company's shares are up 3.5% to 44.5 cents. They were up 9% at one stage to 47 cents.

How did Elixinol Global perform in FY 2019?

For the 12 months ended December 31, Elixinol reported a 16% year on year decline in revenue from continuing operations to $27.2 million.

Management advised that this was due to a 34% decline in bulk sales due to the influx of cheap, poor quality product and a 56% decline in private label sales due to the termination of low margin private label contracts.

One positive was that the company delivered a 35% increase in high margin Elixinol branded and co-branded product sales during the 12 months. Elixinol branded product sales now represent 59% of total revenue, up from 37% in FY 2018.

The company's continuing operations reported an EBITDA loss of $22.9 million and a loss after tax of $83.5 million. This reflects non-cash asset impairment charges of $48.8 million due to a reset of expectations. These include $39.4 million goodwill and $8.4 million for excess inventory provisions.

Elixinol had cash and cash equivalents of $20.4 million at the end of the period.

Management commentary.

Elixinol's CEO, Stratos Karousos, was pleased with the performance of Elixinol branded products in FY 2019, but acknowledged that its overall performance was disappointing in the second half.

He said: "It's pleasing to see sales of Elixinol branded products have increased 35% in FY2019. This highlights Elixinol's leadership team are executing on our refined strategy of focusing on high margin Elixinol branded hemp-derived CBD products. Although revenues in Q3 and Q4 FY2019 were disappointing, we undertook swift action to divest non-core assets and simplify the business model."

Mr Karousos appears confident that its cash burn rate will improve greatly in the future.

He added: "With a continued focus on cost control and the execution of various working capital reduction initiatives, the future quarterly cash burn rate is planned to be lower than historical run rates. Additionally, our operating budget, which is not predicated upon regulatory development in the US and Europe & UK, provides a pathway towards positive cashflow and increased gross margins."

Outlook.

No guidance was provided for FY 2020, but management appears optimistic thanks to new product launches.

Mr Karousos said: "I am excited about our total brand refresh which will be launched in March 2020. Our Elixinol branded product range has been optimised to suit customer demands and we have a pipeline of new and innovative products which will be launched during 2020."

"We will continue to focus on return on investment to enable the company to leverage the significant capital that has been deployed in operations, eCommerce, raw materials and key people. Elixinol's refined strategy on hemp derived CBD in the US, Europe & UK ensures Elixinol is well positioned to grow its high margin branded products, despite prolonged regulatory developments, with a pathway to positive cashflows and will be able to capitalise on the expected global growth in the hemp derived CBD market in 2020 and beyond," he concluded.

The post Why this ASX cannabis share zoomed 9% higher today appeared first on The Motley Fool Australia.

The cannabis company's shares finished the week with a massive 14% decline to 77 cents.

Its shareholders will no doubt be hoping for better on Monday. Though, that will depend on the reaction to the release of an announcement this morning.

What did Elixinol Global announce?

This morning Elixinol Global announced that it has agreed to sell its subsidiary Hemp Foods Australia to a subsidiary of Shanghai Shunho New Materials.

Management notes that the sale of the Hemp Foods Australia business is in line with Elixinol Global's refined strategy to focus on the hemp derived CBD market.

According to the release, Shanghai Shunho New Materials will acquire the business for a cash consideration of A$500,000.

Completion is conditional on, amongst other standard conditions, obtaining third party consents and entry into a licence agreement between Elixinol and Shunho appointing the latter as the exclusive licensee to manufacture and distribute Elixinol branded hemp derived CBD products in China, Hong Kong, Taiwan, and Macau.

Management expects the transaction to complete during the first quarter of 2020.

Non-cash impairment charge.

The release explains that the company expects the sale of the Hemp Foods Australia business to give rise to a non-cash impairment charge of approximately A$12.5 million.

Whilst this is disappointing, management believes the sale will improve its future operating cashflow and allow it to focus its capital and resources solely on its hemp derived CBD products business.

The company's Chief Executive Officer, Stratos Karousos, said: "We are pleased at the opportunity Hemp Foods Australia will have under Shunho's guidance and the ability to leverage Shunho's experience in hemp cultivation, manufacturing and distribution, particularly in Asia."

"During negotiations of the sale of HFA, it became apparent that Elixinol could benefit from Shunho's extensive experience and reputation in Greater China and we have agreed to sign an exclusive licence to Shunho in relation to the manufacturing and distribution of Elixinol branded hemp derived CBD products in China, Taiwan, Hong Kong and Macau which aligns with our global strategy," he added.

Nunyara sale.

This morning the company also revealed that it has decided against pursuing its application for a medical cannabis cultivation licence in Australia.

In light of this, it will begin the process of selling assets owned by its Nunyara business (including the land) and redeploy the cash proceeds to support its Elixinol CBD operations.

This decision gives rise to another non-cash impairment charge of A$4.8 million.

The post Cannabis share Elixinol Global announces asset sales appeared first on The Motley Fool Australia.

However, some of the biggest listed groups have bounced back in January and are up as much as 100% this year.

Here's why 3 of the biggest names in the booming cannabis industry have rocketed higher in 2020.

Cann Global Ltd (ASX: CGB)

Shares in this $51.61 million ASX cannabis group doubled since the start of the year, but have since pulled back to be trading for $0.016 per share, up 14.18% year to date.

The current share price is still a far cry from the stock's 52-week high of $0.051 per share set in early September.

The group re-listed in late August 2019 after previously being a mining company called Queensland Bauxite. Shares quickly sank lower and closed out the year at a 52-week low as concerns about profitability grew,

However, steady operational updates and general optimism in the sector have seen Cann Global shares climb higher in 2020.

Cann Group Ltd (ASX: CAN)

Not to be confused with its smaller rival, the Cann Group share price has been soaring higher in 2020.

The group is now the largest of the ASX cannabis shares with a market capitalisation of $215.77 million. While still very much a small-cap, the group's shares are now up 125.80% in the space of just a few weeks.

The Cann Group share price rocketed 25% higher in early January after an announcement with IDT Australia Ltd (ASX: IDT).

The 2 groups reported GMP extraction activities are underway for the first batches of medicinal cannabis resin.

Elixinol Global Ltd (ASX: EXL)

Elixinol Global is another which has seen its share price surge higher in 2020. Elixinol shares are up 86.20% after falling 5.65% lower in today's trade.

Elixinol boasts a market capitalisation of $149.62 million, which makes it one of the largest ASX cannabis groups on the market.

The Elixinol share price finished 2019 in disappointing fashion as its shares crashed to a 52-week low of $0.51 per share in mid-December.

However, renewed optimism and a bullish market have boosted the ASX cannabis company's shares higher to close today's trade at $1.08 per share.

The post Why these 3 ASX cannabis shares are flying high in 2020 appeared first on The Motley Fool Australia.