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Aussie pot stocks storm higher: Here’s what you need to know

It has been yet another eventful day in the world of Australian pot stocks. After reasonably sharp declines for many of them earlier in the week, they have bounced back strongly today.

Here’s the state of play in the industry today:

The Auscann Group Holdings Ltd (ASX: AC8) share price climbed almost 3% to 58 cents before the company placed its shares in a trading halt pending an announcement. According to the release the announcement is in regards to an update to its Australian operations. Shareholders will no doubt be hopeful this is positive news relating to license application.

The Cann Group Limited (ASX: CAN) share price has exploded higher after hitting the bourse today. Its shares climbed as high as 77 cents in early trade. At present they are up 100% from their 30 cents listing price to 60 cents. With an impressive list of directors and key links with a major Canadian producer, leading hedge fund Tribeca Investment Partners has seen enough potential in the company to invest in its IPO.

The Creso Pharma Ltd (ASX: CPH) share price is down slightly to 58 cents today. Earlier this week Creso Pharma announced that it had imported the first medicinal cannabis products into Australia under new government legislation. Surprisingly the reaction to the news has been relatively subdued.

The Hydroponics Company Ltd (ASX: THC) share price has also rocketed higher on its first day on the ASX boards. At the time of writing its shares are up 82.5% to 36.5 cents. The Hydroponics Company aims to be a leading manufacturer and distributer of cannabis products and equipment.

The MMJ Phytotech Ltd (ASX: MMJ) share price has fallen 16% to 41.5 cents today. Once again, the company’s shares have tumbled despite another huge rally in the shares of its Canada-listed 60%-owned Harvest One Cannabis.

The MGC Pharmaceuticals Ltd (ASX: MXC) share price has edged higher to 5.9 cents. Earlier this week the company announced a collaboration with the Royal Melbourne Institute of Technology on a full suite of medicinal cannabis research initiatives, initially centred on genetics and cultivation.

The Stemcell United Ltd (ASX: SCU) share price has jumped 11.5% to 14.5 cents today despite there being no news out of the company.

The Zelda Therapeutics Ltd (ASX: ZLD) share price is up 4.5% to 9.2 cents. Last month the company announced plans to expand its clinical trials in Chile to cover autism. Management aims to commence the trials in the second-half of the year.

As I have said previously, I do feel one or two of these companies could go on to have great success. But it is still very early days and picking a winner out of a growing pool of companies is very difficult. For this reason I think the majority of investors would be better off watching on from the sidelines for the time being.

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As of 2.11.2020

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.

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