Will COVID-19 impact pot stocks? Depends on what part of the industry you’re in
Health & Biotech
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In recent weeks there’s been little to cheer about for holders of cannabis small caps on the ASX. But beyond the bubble of the ASX, some companies may benefit from the crisis.
Yesterday Rhys Cohen, principal consultant at FreshLeaf Analytics, told Stockhead medicinal cannabis companies may see higher prescriptions.
He said one general manager at a medicinal cannabis clinic told him there’s been an increase in referrals for patients with mental health conditions.
“The current situation with COVID-19 is highly stressful for many people and doctor referrals for these subgroups is on the rise,” he said.
Today one medicinal cannabis small cap bounced after giving its shareholders hope there was at least some degree of normality.
AusCann (ASX:AC8) first of announced it was beginning its first independent clinical trial in three weeks to assess the benefit of its product for patients.
The company said it would adjust the study timelines if required.
It also revealed that its cannabinoid-based capsules were now available for prescription and it would begin distribution.
AusCann’s shareholders welcomed the news, sending shares up 19 per cent this morning.
Cannabis products were not specifically named but some approved products are on the list of “Schedule 4” goods which was covered by the order.
Meanwhile, there is a potential opportunity for cultivators as COVID-19 impacts the supply chain.
Some cultivators may not survive, but others will be in a good position to swoop in and fill any gap left from those forced to make an exit.
“Some international supply chains are also facing delays as borders shut and freight routes are re-adjusted, but this is not a major issue yet,” Cohen said.
“For those cultivators and manufacturers already operational, production volumes are mostly expected to continue as normal.
“Some are even expanding production to take advantage of any upcoming competitor exits.”