Weed Week: Moves are afoot in the US to fix a cannabis ‘scheduling’ clash
Health & Biotech
Health & Biotech
Link copied to
It was a little from Column A and a little from Column B for local cannabis stocks this week, as investors look for breakthroughs in the sector amid the broader market rally.
Of the 34 cannabis (or cannabis-adjacent) small caps tracked by Stockhead, 10 posted a weekly gain while six were unchanged, and the other 18 dipped into the red.
Among the winners list (more on that later) there were a couple of capital raising announcements, as companies took advantage of the bullish sentiment in markets to top up their balance sheets.
Elsewhere, one global cannabis story that caught our eye this week came out of the US, where a lawsuit has been filed against the Drug Enforcement Administration (DEA) for the wrongful classification of marijuana as a “Schedule 1” drug.
To get categorised in Schedule 1, a drug must be deemed to have no accepted medical use and also the potential for abuse.
As industry-watchers would know, significant research has gone into proving marijuana’s use-case as a medical product.
But according to Leafly, the group bringing the lawsuit argues the DEA’s classification leaves medical researchers in a Catch-22; cannabis is a Schedule 1 drug partly because no clinical trials have been run to test its safety and effectiveness, but as long as it remains on Schedule 1, clinical trials are off the table.
Sue Sisley, a researcher at Arizona’s Scottsdale Research Institute (SRI), says the aim of the lawsuit is to enable clinical trials for the whole cannabis flower to prove its medical effectiveness.
Below is a summary of weekly and annual price performance for ASX-listed cannabis stocks
Scroll or swipe to reveal table. Click headings to sort.
Cannabis-adjacent farming company Wide Open Agriculture (ASX:WOA) (which last year planted an industrial hemp crop) led the pack this week with a gain of more than 40 per cent.
Markets reacted positively to Wide Open’s capital raising announcement, where it completed an oversubscribed $3m placement to sophisticated investors at 27c per share to drive further growth for its regenerative food products.
And medtech company Rhinomed (ASX:RNO), which is developing applications for the delivery of medical cannabis products, also climbed strongly ahead of an announcement yesterday that it had signed a new US pharmacy distribution deal for its Pronto Clear vapour inhaler.
Despite the gains, shares in Rhinomed have fallen steadily since it reached a 12-month high last July above 35c.