Exclusive Interview with Elixinol Global CEO Stratos Karousos and Chief Innovation Officer Paul Benhaim
Since Paul Benhaim last spoke with New Cannabis Ventures in 2018, his company, Elixinol Global (ASX: EXL) (OTC: ELLXF), has continued to aggressively pursue international expansion through its three divisions. Benhaim, now Chief Innovation Officer of the company, and newly appointed CEO Stratos Karosous checked in with New Cannabis Ventures to discuss the company’s restructured leadership and growing footprint. We have summarized the interview, of which an audio recording of the entire conversation is available at the end of the summary.
The Three Divisions of Elixinol Global
Elixinol USA, the company’s Colorado-based CBD business, has been generating the largest portion of Elixinol Global’s revenue.
Hemp Foods Australia is the company’s legacy business, which has a future in branded products. For example, the company recently launched hemp burgers in the Australian supermarket chain Woolworths.
Nunyara, Elixinol Global’s medical cannabis business, is still in its startup phase. The company has received its manufacturing license, but it is still waiting on its cultivation license. This division is taking up minimal resources while Elixinol Global focuses on its CBD business, according to Benhaim.
The United States is the main market of focus for Elixinol Global. The company just opened its new processing facility outside of Boulder, Colorado, which is expected to more than double the capacity of the company’s previous facility.
The company has also made inroads with distribution partnerships in the U.S. For example, the company is working with Albertson’s, Safeway Group, and inked an $18 million white-label deal with Pet Releaf.
Elixinol Global is also forging distribution channels in Europe, another important market. The company has signed a distribution deal with retailer Holland & Barrett in the U.K. and opened a pharmacy distribution channel in Germany through an agreement with MedVec.
In Asia, the company has deployed more people to support its joint venture partnership in Japan. Elixinol Global will leverage that market position to expand into other Asian markets.
Research and Development
Investing in new technology and product development is a significant element of Elixinol Global’s growth strategy. The company recently acquired new microencapsulation technology, and it is developing technologies to support CBD-infused foods and beverages. For example, the company is working on odorless, tasteless, bioavailable, and water-soluble powders.
This focus facilitated the company’s Elixinol USA’s partnership with RFI. Benhaim sees the partnership, Infusion Strategies, opening the door to working with some of the biggest fast-moving consumer goods companies in the U.S. The partnership’s opportunity to develop significant sales will likely come once the FDA clarifies its stance on CBD.
Restructuring the Leadership Team
Benhaim, a co-founder of the company’s three businesses, has 25 years of experience in the hemp industry. He knew at some point the company’s growth would outpace his expertise in the CEO role, but that time came quicker than expected. The company added a new non-executive board member: Greg Ellery. Ellery brought a wealth of experience in global, fast-growing CPG companies, and he helped the company see a new structure for the future.
During this process, the company’s team and board examined leadership roles and the ideal skill-sets needed to guide a global company. Benhaim didn’t see his skills aligning with the new vision for CEO. Rather, he wanted to focus on continued innovation leadership and communicating with investors. So, his role shifted to Chief Innovation Officer, and the company began the search for the new CEO.
Benhaim knew a change in leadership would be disruptive, so he wanted to make the process as smooth as possible. Rather than bringing in outside talent, the company focused on an internal search. Already on the leadership team, Karousos was a natural fit. He and Benhaim have known one another since before Elixinol Global became a public company. Karousos’s commitment to the company and experience as a mergers and acquisitions lawyer made him an ideal fit.
Funding and Execution
Elixinol Global raised A$50 million earlier this summer, largely to support the expansion of its U.S. business. The funding helped Elixinol USA acquire the raw material it needed to assure its larger customers the business was capable of achieving the necessary scale, according to Benhaim. The company is well-capitalized for at least the next 12 months.
As the company moves forward, it is open to acquisition opportunities, but Benhaim has yet to see what the company’s role will be in market consolidation.
Given the complex regulatory environment and fast-growing nature of the business, the company has elected not to give forecasts. But, Benhaim expects ongoing growth as the company continues to execute on its strategy. Elixinol Global is committed to investing in new technology, growing its supply chain, creating new partnerships, and having strong management to carry out those goals.
To learn more, visit the Elixinol Global website. Listen to the entire interview: