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While the broader All Ordinaries Index (ASX:XAO) has shown a positive trajectory during Tuesday's lunch hour, the cannabis sector tells a different story. Two ASX-listed cannabis stocks, Little Green Pharma Ltd and Botanix Pharmaceuticals Ltd, are currently grappling with challenges, resulting in a struggle for their share prices.
Little Green Pharma Share Price Falters Amid European Sales Slump
Little Green Pharma (ASX: LGP), a vertically integrated medicinal cannabis business, has seen its share price decline by 3.1%, with shares trading at 15.5 cents apiece. The company recently released its quarterly updates, shedding light on its financial performance.
Little Green Pharma reported quarterly revenue of $6.2 million, in line with the previous quarter's figures. Similarly, cash receipts remained consistent with the prior quarter at $6.6 million. Additionally, the company disclosed trade receivables of $1.8 million at the end of the quarter.
While revenue in Australia witnessed a 5% increase quarter on quarter, a significant concern stems from the 33% decline in sales into Europe. However, the company anticipates robust demand from France, citing an additional 7,000 units of oil sent during the quarter.
The company's balance sheet reveals cash reserves of $6.2 million and long-term debt of $3.6 million as of September 30.
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ASX Cannabis Stock Slips Amid Ongoing FDA Approval Process
Botanix Pharmaceuticals(ASX: BOT), a clinical-stage cannabinoid therapeutics company, is also experiencing a decline in its share price, down 1.8%, as a result of its quarterly update. The company had previously seen a remarkable 300% increase in its share price year to date, driven by expectations of pending United States FDA approval for its Sofpironium Bromide product, designed to treat excessive sweating.
However, the FDA approval process hit a snag due to issues with packaging instructions, leading to a 32% slump in the share price. Despite this setback, the stock remains up 174% in 2023.
Botanix is resubmitting for approval, with the final required component set for submission in the first quarter of 2024, targeting approval by mid-2024. Investors seem cautious about recommitting to this ASX cannabis stock until more certainty is provided by the FDA.
In the previous quarter, Botanix raised $12.5 million through an institutional placement to both new and existing shareholders. The company's balance sheet reflects cash holdings of $6.8 million, and management anticipates an additional $2 million from the R&D tax return in November.
