Can The Pot Stocks Get The Smoke Back; CAN, AC8, THC

  • Dec 20, 2019 AEDT
  • Team Kalkine
Can The Pot Stocks Get The Smoke Back; CAN, AC8, THC

Cannabis industry is booming at a rapid pace, with several governments creating opportunities for investors by legalising recreational and medicinal cannabis. With increasing legalisation of cannabis, number of investors and entrepreneurs jumping into this industry is also surging.

In addition to use in the drug industry, there is a wide range of cannabis related consumer products that include drinks, coffee, sleep inducing tea and edibles. Cannabis is also used in beauty products such as lip balm, makeup items, moisturisers, and skin oils.

Following are some of the ways to invest in pot stocks.

  • Cannabis stocks listed in Australia- One way to invest in cannabis stocks is to buy stocks of cannabis companies or companies with cannabis exposure that are listed on the Australian Securities Exchange (ASX);
  • Global cannabis stocks- Few of the largest players in the global cannabis market are listed on stock exchanges in economies such as the United States or Canada. With broker services, one can get access to these stocks;
  • Exchange Traded Funds (ETFs) related to Cannabis- These often track an index of stocks. Approximately 6 cannabis ETFs listed in the US;

Medicinal cannabis is already legalised in Australia, consequently investors can avail the ample opportunities available in the market. Moreover, cannabis has a relative inelastic demand from patients as well as recreational consumers. Thus, demand for this product would continue to grow in the coming years.

In this article, we are discussing three ASX listed cannabis stocks, which are performing well in the medical cannabis industry.

Cann Group Limited (ASX: CAN)

Australia headquartered cannabis company Cann Group Limited (ASX: CAN) is focusing on the breeding, manufacturing and cultivation of medicinal cannabis for use and sale in the country. The company has established facilities for research and agriculture in Melbourne and is trying to offer access to therapeutic cannabis for patients.

Cann Group was issued with first medicinal cannabis research and cultivation licence in Australia in February 2017 and in March 2017, respectively. One of Canada’s largest listed medicinal cannabis companies- Aurora Cannabis Inc is a cornerstone investor with a 22.5% shareholding in Cann Group.

CAN and IDT to Produce Commercial Medicinal Cannabis Product

On 19 December 2019, Cann Group and IDT Australia Limited (ASX: IDT) unveiled that the former’s first commercial medicinal cannabis product has been packed by the latter under current good manufacturing practice (cGMP) conditions and would undergo testing to confirm the stability. The release of the product to be produced from Cann Group’s Australian-based cultivation operations is anticipated in the first quarter of CY2020.

The two companies have an agreement in place, under which IDT would provide cGMP manufacturing services and support for the conversion of medicinal cannabis into Active Pharmaceutical Ingredients (cGMP grade) and drug formulations for Australian patients, as well as global markets.

Dried flower of medicinal cannabis has been packed into 10g bottles in licensed cGMP manufacturing facilities of IDT and data from the stability testing is due to be made available at the end of January.

Initially, the first commercial cannabis product would be utilised for domestic needs in Australia with Cann Group continuously developing the export pathways. Recently, Cann Group executed the first export of packaged medicinal cannabis dry flower to Canadian player - Aurora Cannabis Inc. The flowers were grown in Australia.

Stock Performance

On 20 December 2019, the stock of CAN closed the day’s trading at $0.470, representing a decline of 1.053% from its previous closing price, with outstanding market shares of approximately 141.87 million. The company has a market cap of nearly $ 67.39 million, while the 52 weeks low and high price of the stock is $ 0.375 and $ 2.570, respectively. The year to date return of the stock stands at -76.25%.

AusCann Group Holdings Limited (ASX: AC8)

Australia-based pharmaceutical company AusCann Group Holdings Limited (ASX: AC8) is into the production, development and supply of cannabinoid-based medicines within Australia and all over the world. The company provides stable, standardised and reliable cannabinoid-based pharmaceutical products to physicians for treating their patients. The physicians monitor the outcomes of treatment and modify algorithms of treatment using a portfolio of cannabis products and formulations.

Board Appointments

Recently on 20 December 2019, the company announced to have appointed Mr Max Johnston and Mrs Krista Bates as Non-Executive Directors of AC8, as part of the Board renewal process unveiled during late-October 2019. AusCann Group would also appoint Mr Johnston as the company’s Chairman effective from the departure of Interim Chairman Hon. Cheryl Edwardes AM on 19 January 2020.

AusCann’s Hard-Shell Capsules Under Clinical Evaluation

After finalising the production and testing of proprietary cannabinoid-based hard-shell capsules, AusCann Group released them for clinical assessment. The company is working to develop a short clinical evaluation, which is commercially focused, with the objective of providing important exposure information related to the selection of dose. The cannabinoid solid fill capsule of the company is a unique presentation for medicines derived from cannabinoid. Once the clinical evaluation begins, the company would update the market.

Key facts related to clinical evaluation-

  • The capsules (hard-shell) were evaluated according to standardised validated tests used within the pharmaceutical industry to confirm the quality of the product before making them available in the market;
  • The solid shell capsules were tested, and it was found that the capsules met all applicable pre-defined criteria set by relevant International Pharmacopoeial standards, Therapeutic Goods Administration (TGA), and quality assurance and control procedures of AusCann;
  • Subsequent to positive outcomes from the clinical evaluation, the company would progress with an accelerated path for the commercialisation of capsules and would supply hard-cell capsules to physicians;
  • During the first half of the calendar year 2020, the company is targeting solid shell capsules to be made available for Australian patients.

Stock Performance

The stock of AC8 settled at $ 0.230 on 20 December 2019, down 2.128% from its previous closing price, with outstanding market shares of approximately 317.05 million. The company has a market cap of nearly $ 74.51 million, while the 52 weeks low and high price of the stock is $ 0.170 and $ 0.790, respectively. The stock delivered a year to date return of -62.70%.

THC Global Group Limited (ASX: THC)

New South Wales (NSW) headquartered medical cannabis company THC Global Group Limited (ASX: THC) is engaged in the cultivation and manufacturing of pharmaceutical grade cannabis. The company has key licences; one for cannabis research, other one for the cultivation of medical cannabis, and two licences for the manufacturing of medical cannabis.

The Southport manufacturing facility of the company is the biggest licenced and permitted pharmaceutical bio-floral extraction plant in the Southern Hemisphere.

Appointment of COO (Chief Operating Officer)

On 19 December 2019, THC Global announced to have appointed Ms Angela Macquire as COO of THC Pharma Pty Ltd, which is the company’s manufacturing and extraction department operating the Southport Facility.

Ms Macquire has more than 30 years of experience in the UK and Australian pharmaceutical industry. She would join THC Pharma from late January 2020, as the company is growing towards commercial scale production of Australian medicinal cannabis medicines.

First Medicinal Cannabis Processed

Early December 2019, the company had updated the market regarding the completion of d the first farm-to-pharma processing of medicinal cannabis at the facility. This was a significant milestone for the company, as it demonstrated the commencement of its manufacturing activities.

Stock Performance

On 20 December 2019, the stock of THC closed the day’s trading at $ 0.370, with outstanding market shares of approximately 137.28 million. The company has a market cap of nearly $50.79 million, while the 52 weeks low and high price of the stock is $0.305 and $0.630, respectively. The stock delivered a year to date return of -21.28%.


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