Weed Week: Major shifts in US legislation set to open the door for some ASX cannabis stocks
Health & Biotech
Health & Biotech
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There was plenty of action in the US regulatory front within the cannabis sector this week.
A couple of major legislations during the week could potentially shake up the US cannabis industry.
The Marijuana Opportunity Reinvestment and Expungement (MORE) Act has been reintroduced to Congress by US federal lawmakers, which would eliminate the federal ban on cannabis.
The MORE Act had already been passed by the House of Representatives in December, but was left to languish by the-then Republican-controlled Senate.
After the US election however, the upper chambers of Congress are now controlled by the Democrats, and the MORE Act is likely to enjoy significant support going forward.
The other big move in legislation during the week was the Senate Bill 519 passed by California State, which could legalise the use and possession of psilocybin and other psychedelic compounds.
If passed into law, SB 519 will approve the use of mushrooms, MDMA, LSD, mescaline and ibogaine for combat veterans with PTSD, and people with diagnosed or undiagnosed addictions and mental illnesses.
Meanwhile, police in the UK unexpectedly uncovered a cryptocurrency mining operation during a raid on what they thought was a cannabis farm.
The set-up was camouflaged and had “classic cannabis factory signs”, but what the police found instead was 100 computer units powered by stolen electricity from supplier Western Power.
Back home in Australia, there were also lot of new developments coming out the sector.
Of the 36 companies in the ASX cannabis sector, 10 gained ground over the past two weeks.
Note: data was captured on Wednesday 2 June, 2021.
Suda Pharma (ASX:SUD) was the best performer in the sector over the last two weeks, rising by more than 20 per cent. Suda is continuing to work with partner Cann Pharma to develop medical grade cannabis.
Although Creso Pharma (ASX:CPH) did not perform as well over the last weeks, it made up for it in a single day yesterday. The company is well positioned to become the first mover in the psychedelic mushrooms space in California, after a bill was passed in the California Senate to legalise psychedelic drugs. CPH shares rose nearly 30% on the news.
Cann Group (ASX:CAN) disappointed the market after downgrading its full year revenue to between $4m to $5m for FY21. The company said delays in manufacturing and supplies were the main reason for the miss.
Avecho (ASX:AVE), meanwhile, has proceeded to a pre-submission with TGA for its pharmaceutical cannabidiol (CBD) soft-gel product. The meeting will discuss, amongst others, the company’s planned clinical program for the product.
Epsilon (ASX:EPN) has received a total of $1.02 million in R&D tax incentives from the ATO. The tax incentive offers eligible entities a refundable tax offset of up to 43.5% on certain R&D activities, with two of its subsidiaries THC Pharma and Canndeo being eligible.
At Stockhead, we tell it like it is. While Creso Pharma is a Stockhead advertiser, it did not sponsor this article.