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Why the Auscann Group Holdings Ltd share price just rocketed 15% higher

The Auscann Group Holdings Ltd (ASX: AC8) share price has been one of the best performers on the Australian share market today.

In afternoon trade the medicinal cannabis company’s shares are up a massive 15% to 53 cents.

What happened?

This morning AusCann’s shares emerged from their trading halt following the release of a positive update on its Australian operations.

According to today’s release, AusCann has been granted a licence to manufacture medicinal cannabis in Australia.

This latest licence enables the manufacture and supply of cannabinoid medicines and completes the supply chain for the company. Previously the company had been granted cultivation licences in Western Australia and Tasmania.

Should you invest?

As this licence makes AusCann one of the first complete and fully Australian supply chains to provide medicinal cannabis products to patients, management believes it puts the company in a strong position moving forward.

And I agree. Although I’m holding off an investment in the sector until there are meaningful sales being generated, anyone looking to gain early exposure to the industry could do a lot worse than AusCann.

With all its licences in place, a strong cash balance, and royalty-free shared expertise from Canadian giant Canopy Growth Corp, I believe AusCann has as good a chance as any to succeed.

The shares of strategic partner Zelda Therapeutics Ltd (ASX: ZLD) are also higher on the news.

Finally, if it is a little too soon for you to invest in pot stocks then these hot stocks could be exactly what you need. I'm tipping them to smash the market over the next 12 months.

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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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