Elixinol Global’s plan to sell its Hemp Foods Australia (HFA) arm for $500,000 are in tatters after its Chinese buyer pulled out citing the failure to meet a condition in the Share Purchase Agreement (SPA).

Shanghai Shunho New Materials Technology terminated the deal – with Elixinol telling the ASX COVID-19 was to blame for the SPA breach. It will continue to operate HFA following the collapse of the sale while it considers its next move.

Exinol Group CEO Oliver Horn said the sale had been part of its wider strategy to focus on the hemp-derived CBD market.

He added HFA’s brands, including The Essential Hemp and Grounded food lines and Sativa skincare range were “well positioned to service consumers’ growing needs for more environmentally friendly, clean and plant-based foods… and more natural personal care products.”

During the first quarter of 2020, HFA generated revenue of $1.3m and an EBITDA loss of $200,000 (unaudited).