Why the Auscann Group Holdings Ltd share price has surged higher again

The Auscann Group Holdings Ltd (ASX:AC8) share price has been a big mover again. Here's what sent its shares higher today…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Auscann Group Holdings Ltd (ASX: AC8) share price has been a big mover today after the pot stock announced that its first medicinal cannabis crop in Chile is now being harvested.

At the time of writing AusCann's share price is up almost 6.5% to 82.5 cents.

According to the release approximately 300kgs of dried cannabis product from the harvest will be sent to a GMP certified manufacturing facility to be processed into medicinal cannabis formulations.

Furthermore, of the strains harvested, four have been selected as superior strains which have been clonally selected for future crops.

What's next?

Should the clinical trials in Chile be successful, these formulations will be registered through the Chilean National Institute of Public Health and then made available for sale to Chilean patients and export markets.

This will also allow AusCann to import product ahead of the expected demand from authorised prescribers and patients in Australia, putting the company in a strong position to quickly provide patients access to the medication.

As well as the significant opportunity in the Australian market, managing director Elaine Darby believes there is a lucrative opportunity for medical cannabis products to be used for pain control in the South American market.

She is confident the company and its joint venture partner have selected the strongest and most appropriate strains for effective medicine formulations.

Should you invest?

Whilst I am a big fan of AusCann and its talented management team, I wouldn't necessarily rush into an investment at this point purely on valuation grounds.

The shares of AusCann and fellow pot stocks Zelda Therapeutics Ltd (ASX: ZLD), Creso Pharma Ltd (ASX: CPH), and MMJ Phytotech Ltd (ASX: MMJ) have all run hard in recent weeks.

With a significant amount of growth baked into their share prices, I plan to watch from the sidelines for the time being until the sales come rolling in.

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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »