What’s Hot with Cannabis Stocks? Four Stocks to Watch-BOT, THC, AC8, CAN

  • Oct 23, 2019 AEDT
  • Team Kalkine
What’s Hot with Cannabis Stocks? Four Stocks to Watch-BOT, THC, AC8, CAN

Amidst the global market fickleness, competition and economic pressure, cannabis stocks stand out as the hot pick stocks for investors. The Cannabis stocks are gaining traction with the sector growing at a fast pace with new listings and increased production, underpinned by legalisation of medicinal cannabis products manufacturing as well as consumption by the government authorities. Hence, companies and investors are looking for opportunities to enter the cannabis space.

Blooming as a multibillion-dollar sector with robust growth prospects, the Medical Cannabis sector in Australia is also expanding rapidly. Lately, several changes were suggested related to the licensing that regulates cannabis related business, and were listed in the Australian Parliament in September 2019.

In this article, we would zoom our lens over four Cannabis stocks listed on ASX along with their latest developments.

Botanix Pharmaceuticals Limited (ASX: BOT)

Perth and Philadelphia based clinical stage synthetic cannabinoid company, Botanix Pharmaceuticals Limited (ASX: BOT) develops topical treatments for serious skin diseases that are safe as well as effective, taking advantage of the unique anti-inflammatory, immune modulating and antimicrobial properties of synthetic cannabidiol.

Botanix has an advanced dermatology pipeline as shown below.

Botanix Pharmaceuticals Limited

BTX 1503 Acne Phase 2 Study Results

As announced on 22 October 2019, BOT’s securities were placed on a trading halt at the request of BOT, pending release of an announcement regarding BTX 1503 Acne Phase 2 Study Results. BOT resumed trading today on the release of the results, the snippet of which is given below-

BTX 1503 Acne

Botanix is moving forward with its preparations for Phase 3 clinical program and planning an end-of-Phase 2 meeting with the US Food and Drug Administration

Cannabidiol supply agreement signed between Botanix and Purisys

  • Dated 21 October 2019, Botanix notified the market on the Supply Agreement execution with the industry’s leading provider of ultra-pure, pharmaceutical grade cannabidiol technology, Purisys, covering the immediate expanding demand and future commercial supplies of synthetic cannabidiol active pharmaceutical ingredient (API).
  • Under this agreement, Botanix and Purisys would also collaborate to set forthcoming bulk requirements as well to scale up and optimise the manufacturing process.
  • The agreement is termed up till December 2027.

Grant for Botanix’ Synthetic Cannabidiol Analog Program

  • In an announcement dated 15 October 2019, it has been notified that Botanix puts a feather in its hat by receiving a new Innovation Connections Grant award from the Federal Government’s Department of AusIndustry.
  • This grant would fast-track Botanix’ medicinal chemistry program that targets the manufacturing of new synthetic analogs of cannabidiol, in addition to investigate further the mode of action of cannabidiol.
  • To overcome the challenges of bioavailability of the natural molecule and to enhance the performance of cannabidiol, new analogs are being developed have a unique structure and activity profile that can be patented as novel chemical entities.
  • Development of synthetic cannabidiol analogs is taking place with the support from scientists at The University of Queensland (UQ).

Stock Performance

On 23 October 2019, BOT’s shares are trading at $0.125, down by 47.9% (as at 03:25 PM AEST). The market capitalization of the company stands at $231.48 million with 964.5 million outstanding shares. BOT’s stock has generated an outstanding YTD return of 228.77% till date.

THC Global Group Limited (ASX: THC)

A vertically integrated global pharmaceutical company with a focus on ‘Farm to Pharma’ pharmaceutical model, THC Global Group Limited (ASX: THC) develops cannabis, as well as manufactures and distribute hydroponics equipment, materials and nutrients. THC Global holds all three main cannabis licenses, namely a Cannabis Research Licence, a Medicinal Cannabis Licence (Cultivation), and two Manufacture Licences via its domestic medicinal cannabis subsidiaries THC Pharma and Canndeo.

THC Global’s New Zealand CBD Presence

  • Recently, the Company released an update on marking its presence in New Zealand related to its exclusive distributor agreement with Endoca to provide cannabidiol (CBD) products to patients in New Zealand.
  • THC Global notified that exclusive distribution of Endoca CBD products in New Zealand remains to be continued and the product shipment has recently landed in the Country.
  • Assuming the strict regulatory guidelines for the supply of medicinal cannabis to patients in Australia, access to CBD products is relatively straightforward with broader patient accessibility, in New Zealand.
  • THC Global had also provided financial aid to a health care company in New Zealand, DATAPHARM to launch a CBDinfo which is an information portal that provides appropriate and evidenced data regarding the use, availability, safety and efficacy, potential benefits and risks of using CBD products. It was launched in July 2019, and since then more than 100 healthcare professionals have enrolled on this CBDinfo.co.nz. portal.
  • The Company had also established a supply pathway under New Zealand regulations to be used for supplying THC Global’s Australian produced medicinal cannabis next year.

Grant of S4 and S8 Narcotics Licences

Recently, THC Global had received S4 and S8 Narcotics Licences at its Southport and Bundy facility, permitting the manufacturing and wholesale of S8 and S4 drugs. With this grant, the Company had begun the extraction and further processing of cannabis.

Stock Performance

On 23 October 2019, THC’s shares are trading at $0.39, up by 1.3% (as at 03:25 PM AEST). The market capitalization of the company stands at $52.58 million with 136.57 million outstanding shares. THC’s stock has generated a negative YTD return of 18.1%.

AusCann Group Holdings Ltd (ASX: AC8)

AusCann Group Holdings Limited (ASX: AC8), an Australian based Pharmaceutical Company with a focus on cannabinoid-based pharmaceuticals is involved in product innovation and clinical partnering within the medical cannabis sector, outsourcing raw material supply, manufacturing and distribution of products to leading global suppliers.

Change in Substantial Holding

  • Merchant Funds Management Private Limited, a Western Australian based financial services firm with both Australian and international investment experience in the medical cannabis sector - change in the voting powers (effective from 18 October 2019) to 12.43% with 39,400,000 fully paid ordinary shares relative to the previous voting power of 11.43% and 36,237, 639 fully paid ordinary shares.
  • Canopy Growth Corporation ceased to be a substantial holder of AusCann Group with effect from 14 October 2019.
  • In a notice dated 14 October 2019, Canopy Growth sold off 42,087,639 shares in AusCann (13.2% interest), carried out off-market with 11.43% of the holding acquired by Merchant Funds Management Pty Ltd.

AusCann’s Financial Situation (for the period ending 30 June 2019)

  • Loss of the consolidated entity amounted to $7,649,221, vs the loss for FY18 of $7,668,308.
  • Non-cash share-based loss was $57,943 for FY19 vs $2,712,500 for FY18.
  • Growth in net assets to $41,668,347 at 30 June 2019 from $14,112,032 as at 30 June 2018.

Stock Performance

On 23 October 2019 (as at 03:25 PM AEST), AC8’s shares are trading at $0.265, down by 1.85%. The market capitalization of the company STANDS at $85.6 million and 317.05 million outstanding shares. AC8’s’s stock generated a negative YTD return of 57.14%.

Cann Group Limited (ASX: CAN)

A company involved in breeding, cultivation and manufacturing range of medicinal cannabis, Cann Group Limited (ASX: CAN) has a vision to provide access to these medicinal cannabis products to Australian patients. Cann’s cultivation facilities are established in Melbourne.

Key Commercial Developments during 2019

  • Under the supply contract announced in October 2018, Cann Group delivered first material to Victorian
  • An Offtake agreement has been signed between Cann Group and Aurora Cannabis to supply Aurora Cannabis with dry flower, extracted resin & other manufactured medicinal cannabis products that are GMP processed. The term of this contract is until 2024.

Strategic Collaborations & Research during 2019

Strategic Collaborations

Stock Performance

On 22 October 2019, CAN’s shares are trading at $1.165 (as at 03:25 PM AEST), down by 4.12%. The market capitalization of the company stands at $172.37 million with 141.87 million outstanding shares. CAN’s stock has generated a negative YTD return of 39.25% till date.


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