The month of May has certainly been a volatile one for investors with exposure to the medicinal cannabis industry.
Some shares have gone gangbusters, others have fallen sharply. Here’s what you need to know:
The Auscann Group Holdings Ltd (ASX: AC8) share price has fallen 21% month-to-date. A $12 million capital raising at 50 cents per share has been the catalyst for the sell-off. Whilst the raising is dilutive, it does arguably put the company in a much stronger position to deliver on its long-term goals.
The Cann Group Ltd (ASX: CAN) share price is up 86% in May. Cann Group hit the ASX boards at the start of the month at 30 cents per share. With an impressive board and cornerstone investors, Cann Group is certainly one to watch in the industry in my opinion. It was the first company in Australia to be granted a licence to cultivate medicinal cannabis.
The Creso Pharma Ltd (ASX: CPH) share price has tumbled 30% since the start of the month despite the fact it became the first Australian company to successfully import medicinal cannabis products. The pharmaceutical company is developing products for both the human and animal health markets. Creso aims to launch two products into the animal health market in the third quarter of 2017.
The Hydroponics Company Ltd (ASX: THC) share price is up 50% since landing on the ASX at 20 cents per share earlier this month. Last week the diversified cannabis company announced a joint venture with US-based Phoenix Life Sciences. The two companies will research, develop, manufacture, distribute and sell medicinal cannabis products in Australia and internationally. The reception to the news has been rather lukewarm.
The MMJ Phytotech Ltd (ASX: MMJ) share price is down a remarkable 38% since the start of the month. In the middle of the month the company advised that its Israeli-based subsidiary PhytoTech Therapeutics had been granted approval to conduct a phase two clinical study into the safety and efficacy of its PTL201 capsules in treating spasticity related symptoms of multiple sclerosis. As positive as the news was, it wasn’t enough to prop up its share price unfortunately.
The Stemcell United Ltd (ASX: SCU) share price is up around 4% month-to-date. However, it is worth noting that its shares are close to 42% lower than their May high. Its share price had a great start to the month, rising close to 41% in one day despite there being no news out of the company. Unsurprisingly it has given back almost all of those gains now.
The Zelda Therapeutics Ltd (ASX: ZLD) share price has tumbled 37% in May. This is all the more remarkable considering Zelda hasn’t released a single announcement this month. Whilst I do think Zelda has a lot of potential, I believe this decline shows why an investment in the industry is unsuitable for most investors.
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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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