Cannabis stocks fly high, a little too high?
When it comes to getting higher, there is very little that can compete with Australia’s growing list of ASX-listed cannabis stocks.
An investor who bought the main 20 listed stocks in the sector, would have come close to doubling their money in just the past month – an incredible achievement.
Many individual stocks have been going up much faster than that average suggests and some have been earning ASX please explain “speeding tickets’’ for their trouble.
Canadian pot stocks booming
The Australian rises have been a very solid reaction to what is happening in Canada, which is heading towards legalised recreational cannabis use from next year.
The more mature and larger Canadian pot stock market has really been flying high, with their Marijuana Index tracking 18 leading Canadian cannabis stocks rising 44 per cent in the past month.
Constellation Brands adds credibility
That rise followed the purchase by US alcohol giant Constellation Brands of 9.9 per cent of Canada’s biggest medical marijuana supplier Canopy Growth for US$191 million, with analysts seeing that purchase as a way for Constellation to substitute fast growth in the recreational cannabis market for slowing alcohol sales.
Constellation is going to experiment with cannabis infused drinks but the takeaway message from their investment is that this industry is on the way to becoming a legitimate and fast growing market and that global investment is justified.
Australia joins in on the party
Australia’s listed companies have been a logical spill-over for that investor enthusiasm, considering that Canada is likely to run short of cannabis production capacity in 2018 once recreational use is legalised.
No doubt capitalising on investor enthusiasm, the local cannabis stocks and particularly those that can grow their own crops have been making plenty of announcements to keep investors interested in their stories.
An amazing total of nine pot stocks have more than doubled in the last month and even in the past week many of the stocks have gained at least 25 per cent.
AusCann (ASX: AC8)
Industry heavyweight AusCann shot up after it announced its Chilean joint venture had won a second cultivation licence. With the initial crop producing over 400kg of harvest.
Cann Group (ASX: CAN)
Cann Group had its annual meeting and reassured shareholders that it is on track to supply Australian and eventually offshore patients with medicinal cannabis.
MMJ Phytotech (ASX: MMJ)
Shares is MMJ Phytotech leapt 29 per cent this week after it revealed its 59 per cent owned Canadian investment Harvest one was buying a property to expand production capacity and speed to market and was raising $17.5 million in convertible notes.
EVE Investments (ASX: EVE)
It wasn’t just cannabis producers that were feeling the investment love.
EVE Investments shares rocketed 83 per cent to 1.1c each after it announced it was getting into hemp honey by buying half of honey producer Meluka Health.
Meluka claims it has made Australia’s first 100 per cent organic Hemp Seed Honey.
Queensland Bauxite (ASX: QBL)
Queensland Bauxite shares jumped by more than 86 per cent this week after its Medical Cannabis Ltd bought a controlling stake in a hemp factory, Hemp Hulling Co. Earning a speeding ticket from the ASX along the way.
Stemcell United (ASX: SCU)
Stemcell United has been far from shabby, also earning an ASX issued speeding ticket after their stock prices tripled off of no news.
Hydroponics Company (ASX: THC)
The most notable performer has been The Hydroponics company with its memorable ASX code ‘THC’ which has more than quadrupled. This week it brought in a new chief commercial officer and has done a deal with Israeli BOL Pharma to supply it with medicinal cannabis products for Australia, while it develops in-house medicinal cannabis strains in Australia.
Botanix Pharma (ASX: BOT)
Medicinal cannabis research companies were also rising this week with Botanix Pharma enrolling its first patients in a dermatitis study to test a new synthetic cannabidiol treatment for severe eczema.
MedLab Clinical (ASX: MDC)
MedLab Clinical announced that their cannabis pain medications were on the way for 2018, with MedLab supplying oncology patients in a clinical trial from February.
MGC Pharmaceuticals (ASX: MXC)
MGC Pharmaceuticals has recently signed a deal with distributor HL Pharma to introduce its epilepsy product, CannEpil, to the Australian market and has signed off on $1 million sales of cannabidiol extract to European distributor Mabsut Life. They were rewarded with a 35 per cent bounce this week.
Cannpal (ASX: CP1)
Cannpal has been granted an import licence so it can start treating companion animals with cannabis drugs.
Zelda Therapeutics (ASX: ZLD)
Zelda Therapeutics performed strongly and replied to a speeding ticket by saying that it was aware of positive research reports and was continuing discussions around clinical trials.
eSense-Lab (ASX: ESE)
Last week eSense-Lab announced it had finalised its beta cannabis terpene infused chocolate product in collaboration with Healthy Chocolate Florida.
Creso Pharma (ASX: CPH)
A busy week for Creso Pharma which teamed up with China-based hemp producer Zhejiang Kingdom Creative and then signed a deal with Health House International to import and distribute the company’s medicinal-cannabis pain management lozenges to pharmacies throughout Australia.
Cannabis stocks due for a breather
There have been few signs of burnout so far among the Australian pot stocks but with share prices rising this fast, it would not be a surprise if some of them took a breather in the next week or two.