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Why MMJ Phytotech Ltd shares surged higher today

In afternoon trade one of the best performers on the local market has been the MMJ Phytotech Ltd (ASX: MMJ) share price after it emerged from its trading halt.

At the time of writing the pot stock is up 8.5% to 38.5 cents. This brings its one-month return to in excess of 18%.

Why are its shares higher today?

This afternoon MMJ Phytotech announced to the market that Canada-based Harvest One, which it owns a 59% stake in, has provided an update on its wholly-owned subsidiary United Greeneries.

That update reveals that Health Canada has granted United Greeneries the right to sell dried marijuana to registered patients under the Access to Cannabis for Medical Purposes Regulations.

According to a release from Harvest One, United Greeneries has 220 kilograms of dried cannabis buds in storage which are ready for immediate sale.

These are likely to be sold through CannTrust, as the company has a strategic wholesale agreement in place for the first year of its production.

Should you invest?

Whilst it is great to see that the company will be in a position to generate revenues through United Greeneries in the near future, it is of course still early days.

So for that reason I would suggest investors keep MMJ Phytotech on their watchlist alongside other promising medicinal cannabis companies such as Creso Pharma Ltd (ASX: CPH), Auscann Group Holdings Ltd (ASX: AC8), and Zelda Therapeutics Ltd (ASX: ZLD).

Until these companies are generating significant revenues I would hold off an investment and look at opportunities elsewhere on the market.

Such as these quality stocks.

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This company’s dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included.

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Motley Fool contributor James Mickleboro has no position in any of the 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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