Last week was a good one for investors in Australia’s nascent medical cannabis industry, with gains across several key cannabis stocks.
Cann Group (ASX: CAN) charted a new high on the back of news that it had secured an import/export license for cannabis products, while penny stock The Hydroponics Company (ASX: THC) was also up after announcing it received a license to grow and produce medical marijuana.
Cann Group’s import/export licence will be used by the company to send its Australian-grown cannabis to Canada for analysis and testing. On the import side, Cann Group’s CEO detailed plans to bring in a range of cannabis products to be sold alongside its own.
“The granting of this import/export licence is an important milestone in the Company’s goal of building a genetic database of locally and internationally sourced cannabis strains for cultivation under its medicinal cannabis licence, while facilitating the development of a plant breeding program under its cannabis research licence,” Cann Group CEO Peter Crock said in a statement.
Although the national Office of Drug Control had sought community feedback on a streamlined process for exporting Australian cannabis back in July, no formal changes have been made. Cann Group’s license was issued under a generic drug-export scheme. It will need to be renewed after 12 months, and a permit is still required before the company can export any cannabis material.
But despite the remaining red-tape, investors responded favorably to the news, with share prices jumping 15% following the announcement. Cann Group opened on the ASX in May, trading at AU$0.65 a share. On Wednesday it closed at AU$2.11.
The Office of Drug Control’s expanded license grants have brought joy to smaller stocks, too. The Hydroponics Company climbed from its lowest-ever price of AU$0.20 a share to a high of AU$0.33 last week after announcing that subsidiary Canndeo had been granted a cannabis cultivation and production license. It closed at AU$0.33 on Wednesday.
The Hydroponics Company has built its business by manufacturing and selling hydroponic equipment to cannabis growers. But Australia’s cannabis boom has been slower, more concentrated, and more tech-focused than expected. As such, the company is branching out from its shovels-and-picks play.
Canndeo received its research license in July, but the medicinal license announced last week will allow it to begin creating commercial products. CEO David Radford called it “a major step in the transition of the company towards commercial supply and monetisation of the opportunity that exists in the medicinal cannabis market.”
Meanwhile, Australia’s regulatory wheels are rolling slowly. The Office of Drug Control has granted 21 licenses for the cultivation, production, and manufacture of cannabis, but the Australian federal government has so far blocked Senate bills which would open access to medical cannabis for patients, feeding frustration among the country’s medical cannabis community.