Cannabis Industry Outlook 2020 and Related Stocks

  • Jan 25, 2020 AEDT
  • Team Kalkine
Cannabis Industry Outlook 2020 and Related Stocks

After a good end to 2019, Australia’s burgeoning cannabis market is drawing interest from investors as it continues to grow.

The Government gave the official green light to marijuana exports last year and opened the growing global market to Australian cannabis companies. In the meantime, several clinical studies were initiated testing the consequences of medicinal cannabis on a variety of disease conditions such as multiple sclerosis, epilepsy, insomnia, and autism.

After the announcement made by the Government that it plans to legalise the export of marijuana, many pot stocks have turned highly undervalued, and this could be a great news for long time investors who are looking to buy into the cannabis sector or strengthen their capital spending while encountering minimum prices if they are prepared to ride out the market fluctuations.

GOOD READ: ACT Creates History, Becomes First Aussie Jurisdiction to Legalize Recreational Cannabis

Cannabis Industry Outlook 2020

The Australian cannabis industry is all set to turn out to be a major global player in the hemp or cannabis export market. According to some media and research reports, the Australian cannabis industry is anticipated to generate approximately $55 billion by 2025, because of Australia's agricultural expertise and favorable, cannabis-conducive atmosphere.

The global demand for medical as well as recreational use of cannabis is anticipated to increase consistently, at a growth rate of at least ~17% to ~23% annually.

The Medicinal cannabis market is expected to grow globally in upcoming years-

Let us now discuss prospects for four ASX-listed cannabis stocks- AGH, MXC, AC8 and BOT-

Althea Group Holdings Limited (ASX: AGH)

An ASX-listed cannabis player, Althea Group Holdings Limited (ASX: AGH) is engaged in the supply of medicinal cannabis (pharmaceutical grade) products for improving the lives of patients who are suffering from debilitating disorders. The company is a licensed producer, supplier and exporter of medicinal cannabis.

It currently operates in Australia and the United Kingdom cannabis market. Furthermore, Althea has plans to expand its business in the Asian and European emerging markets.

The company provides various products, access and management services along with education to support health care professionals and eligible patients in directing the treatment pathways of medical cannabis. Althea was founded in 2017 and was listed on ASX in September 2018, and the company has made immense developments in a short span of time.

Althea’s Drug Science ‘Project TWENTY21’

  • Drug Science’s ‘Project TWENTY21’ is United Kingdom’s first national pilot for medical cannabis which is for enrollment of 20,000 patients before the end of 2021.
  • The company has been elected from a few medicinal cannabis companies for supplying various range of products to the Pilot’s patients
  • Under this project, the treatment and monitoring of patients are provided by doctors based in MyAccess Clinics.

Althea exceeds the year-end target of 4,000 patients

According to a recent ASX announcement dated 7 January 2020, Althea unveiled that approximately 4,018 patients were prescribed medicinal cannabis products of the company in Australia (as at 31 December 2019)

Stock Information-

On 24 January 2020, the AGH stock closed the day’s trade at $0.47, up by 3.297% compared to its last close. The company’s market capitalisation stood at $106.16 million, with almost 233.31 million shares outstanding. The 52-weeks high and low price of the stock were noted at $1.445 and $0.270, respectively.

MGC Pharmaceuticals Ltd (ASX: MXC)

European based MGC Pharmaceuticals Ltd (ASX: MXC) is a leader in supplying medicines derived from GMP Phytocannabinoid for the patients across the globe. The company has the objective of manufacturing and supplying high-quality cannabinoid-based drugs for the emerging markets in Australasia, Europe and North America.

MGC Pharma has partnership and collaboration with companies, academia and universities at a global level for performing extensive research and developing the highest quality of pharmaceutical products for the patient. The company has strong product offering targeting three widespread diseases- epilepsy, Irritable Bowel Syndrome (IBS) and dementia. Further, MGC pharma has products under development.

MGC Pharmaceuticals has a well-planned product pipeline for the upcoming years with proposed clinical studies-

Stock Information-

On 24 January 2020, the MXC stock closed the day’s trade flat at $0.035. The company’s market capitalisation stood at $47.99 million, with almost 1.37 billion shares outstanding. The 52-weeks high and low price of MXC stock was noted at $0.067 and $0.030, respectively.

AusCann Group Holdings Limited (ASX: AC8)

An Australian-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.

AusCann provides stable, standardised and reliable cannabinoid based therapeutic 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.

Outlook 2020 and beyond

  • The results for the clinical study to inform healthcare practitioners and drive medical acceptance of hard-shell capsules, would be released by the end of first half of 2020.
  • Hard-shell capsules of AusCann would be available commercially for physicians to prescribe in Australia through SAS1/AP2 Scheme, during the first half of 2020.
  • During the first half of 2020, the company would generate real-world outcome data and feedback from healthcare practitioner, related to the hard-shell capsules.
  • In the first half of 2020, AusCann would initiate the development of new differentiated and proprietary cannabinoid-based pharmaceutical dosage configurations.

Stock Information-

On 24 January 2020, the AC8 stock closed the day’s trade at $0.300, down by 4.762% compared to its previous close. The company’s market capitalisation stood at nearly $99.87 million, with almost 317.05 million shares outstanding. The 52-weeks high and low price of AC8 stock was noted at $0.760 and $0.170, respectively.

Botanix Pharmaceuticals Limited (ASX: BOT)

An ASX-listed health care player, Botanix Pharmaceuticals Limited (ASX: BOT) is a clinical-stage cannabinoid company, engaged in the development of cannabidiol-based pharmaceutical products. In June 2019, the company announced positive data from the mechanism of action (MOA) study that pertains to synthetic cannabidiol for skin disease.

Botanix is focusing on the development of a product pipeline that influences the cannabidiol’s antimicrobial properties, and the initial product is expected in the first quarter of the calendar year 2020.

Outlook-

In an ASX announcement dated 13 January 2020, Botanix mentioned that the company plans to attend the JP Morgan Healthcare and Dermatology Summit conferences in San Francisco, the US, on 11 January 2020.

During the meetings, Botanix would meet with a number of industries as well as investor parties to provide an update on the recent Phase 2 acne clinical trial and the undergoing clinical programs.

Moreover, the company revealed that BTX 1204 Atopic dermatitis study remains on target for the first quarter of the calendar year 2020 data and patient enrolment for BTX 1702 rosacea study would commence in Q1 2020.

Stock Information-

On 24 January 2020, the BOT stock closed the day’s trade at $0.094, up by 1.075% compared to its previous close. The company’s market capitalisation stood at nearly $90.46 million, with almost 972.7 million shares outstanding. The 52-weeks high and low price was noted at $0.290 and $0.075, respectively.


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