Why the Cann Group Ltd share price rocketed higher today

The Cann Group Ltd (ASX: CAN) share price has been amongst the biggest movers on the market again today.

In morning trade the medicinal cannabis company’s shares are up 9.5% to $1.15.

What happened?

This morning the company announced that it has executed a licensing and distribution agreement with Massachusetts-based CannaKorp, Inc. to import and sell its proprietary CannaCloud vaporizing system.

Furthermore, the company has secured the right to produce the medicinal cannabis pods associated with the device.

According to the release, CannaKorp’s technology simplifies and improves the inhalation process for medicinal cannabis patients. It incorporates a desktop vaporizer device that accepts single-use pods containing precisely prepared ground cannabis.

In many respects, it is the Nespresso machine of the medicinal cannabis world.

Should you invest on this news?

I think the CannaCloud device is a great product and I see value in it being able to provide doctors with the ability to prescribe medicinal cannabis as an efficient, measured dose.

However, I don’t believe this device is going to make or break the company. Ultimately I believe it will come down to which medicinal cannabis company can supply the highest quality product and form the strongest relationships with prescribing physicians.

One company which I think could be in the lead in this regard is Auscann Group Holdings Ltd (ASX: AC8). I believe its education program and significant links to Canopy Growth Corp puts it in the strongest position to succeed.

However, it is still early days and I would suggest investors hold off an investment for the time being.

Instead of AusCann or Cann, I think investors should consider snapping up these quality stocks.

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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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