MENU

Why the MMJ Phytotech Ltd share price has surged higher today

One of the best performers on the market today has been the MMJ Phytotech Ltd (ASX: MMJ) share price.

At the time of writing the medicinal marijuana company’s shares are up almost 6% to 63.5 cents, bringing its year-to-date return to an astonishing 188%.

Today’s rise is related to news that Harvest One Cannabis is due to commence trading on the Toronto stock exchange as soon as this Friday.

According to the release MMJ Phytotech will have a 60% ownership in Harvest One Cannabis, which is a fully-financed company with two strategic cannabis brands operating in one of the fastest growing cannabis markets globally.

In the near-term Harvest One Cannabis will be focused on scaling up production at its Duncan Facility in Canada on order to enable it to establish a first-mover advantage in the soon to be legalised Canadian recreational market.

Should you invest?

I can’t say I’m surprised to see MMJ Phytotech’s share rally today. If Harvest One Cannabis does manage to establish a first-mover advantage in the Canadian market then it could prove to be extremely lucrative.

After all, management believes the Canadian medical and recreational markets will have an estimated combined value of up to C$9 billion (A$8.8 billion) by 2024.

But there’s still a long way to go before this becomes a reality. So with its shares and those of its peers Auscann Group Holdings Ltd (ASX: AC8) and Zelda Therapeutics Ltd (ASX: ZLD) all priced for significant growth, there is a risk that they could fall sharply should the growth not materialise.

For this reason I think it would be prudent for investors to hold back and wait to see how things unfold over the next 12 months.

In the meantime I would suggest investors focus on these explosive high-flying shares. Each looks set to smash the market this year in my opinion.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.