Weed Week: Cannabis is back with a bang as stars finally begin to align
Health & Biotech
Health & Biotech
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Unless you’ve been living under an (ASX small cap) rock, you’d know that local pot stocks have been up and about lately.
After the long (cold) cannabis winter of 2019, the sector didn’t escape the disruption caused by COVID-19 at the start of this year.
But along with new product developments, investors also appear to the responding to a convergence of regulatory tailwinds as the cannabis industry continues to mature.
The big news last week came from the United Nations, which formally removed cannabis from its Schedule IV classification where it had been grouped in with drugs such as cocaine and heroin.
Local markets reacted to the decision, as nine ASX cannabis stocks posted double-digit daily gains on the day of the announcement.
The sector got another boost this week, after the US House of Representatives to remove marijuana from the Controlled Substances Act — effectively decriminalising cannabis at the federal level.
The bill is unlikely to get through the Republican-controlled Senate, but that didn’t stop cannabis companies from outperforming the market with more big gains on Monday.
Locally, analysts are watching closely for updates from the Therapeutic Goods Administration (TGA), after the federal health regulator postponed its key ruling on pharmacy distribution for low-dose CBD to December (date unspecified).
And last week, a study by the University of Sydney’s Lambert Initative showed that cannabidiol (CBD), when prescribed without THC, doesn’t affect people ability to drive.
All in all, last week marked one of the best for the local sector in recent memory.
Of the 36 pot stocks tracked by Stockhead, 27 gained ground and 21 of those posted a double-digit return. Another five stocks traded flat and just three lost ground.
Below is a summary of the latest weekly, monthly and annual price performance for ASX-listed cannabis stocks:
Scroll or swipe to reveal table. Click headings to sort.
The standout performer over the past week was Creso Pharma (ASX:CPH), which has posted torrid gains over the past week on average daily trading volumes of more than 200 million (October average: ~30m).
While it flagged the positive regulatory developments, Creso also had consistent news flow on the product side as it booked new purchase orders in the European Union and Canada.
A number of other big gainers moved higher without much news on the broader tailwinds.
While yesterday, Cann Global (ASX:CGB) rocketed after announcing it had raised $3.75m (before costs) in a share placement to sophisticated investors at 0.5c per share.
The company said it will use the funds to clear debt, including “outstanding convertible note liabilities”. CGB came out of a five-day trading halt to close 100 per cent higher at 1.2c.