Weed Week: More cannabis reform in the works as pot stocks cool off
Link copied to
As much as (if not more than) any other sector, the outlook for cannabis stocks is driven by key regulatory developments.
Cannabis reform at the global level appeared to provide a huge tailwind for the ASX cannabis sector at the start of this month.
And domestically, the TGA last week confirmed it will approve pharmacy distribution for low-dose CBD products in Australia.
Yesterday, the health regulator followed up with more planned changes, flagging the introduction of equivalent Good Manufacturing Practice (GMP) requirements for imported medicinal cannabis products.
Right now, all domestic producers need to meet the relevant GMP criteria but imported products don’t.
The TGA is also seeking feedback on a proposal requiring that all CBD products are sold with child-resistant packaging, along with other additional labelling requirements.
If the GMP changes are made, a report in mjbizdaily.com flagged that it could put pressure on Canadian growers that don’t meet GMP criteria, given that Australia was Canada’s top export market last year.
The TGA is now accepting submissions and responses on its proposed changes until January 29, 2021.
For local ASX pot stocks, the sector has cooled off from its barnstorming rally at the start of the month.
While supportive cannabis reform helps, investors are also looking for evidence of ASX cannabis players putting runs on the board with established revenues, profit outlooks and viable business models.
Of the 37 ASX companies tracked by Stockhead, 30 finished in the red last week (with 18 double-digit percentage declines) while just four gained ground.
It marked a sharp contrast to when the market surged two weeks prior, when 22 stocks posted double-digit returns for the week including four companies which rallied more than 100 per cent.
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.