Much to the relief of its long-suffering shareholders, the Hydroponics Company Ltd (ASX: THC) share price is finally heading in the right direction.
In morning trade the diversified cannabis company's shares are up 24% to 28 cents.
This gain reduces its six-month decline to approximately 30%.
Why have its shares rocketed higher today?
This morning the company announced that its wholly-owned subsidiary Canndeo Ltd has been granted a Medicinal Cannabis Licence by the Office of Drug Control.
This licence authorises the cultivation and growth of cannabis plants for medicinal purposes and puts it well on its way to reaching its goal of commercial cultivation of medicinal cannabis in Australia.
This is the second of three licences that the company has sought, with its Manufacturing Licence application lodged and waiting for approval.
Should you invest?
While this is certainly a big positive for the company, I believe it is still lagging behind industry leaders Cann Group Ltd (ASX: CAN) and Auscann Group Holdings Ltd (ASX: AC8) who have had licenses in place for some time and arguably have a first-mover advantage.
In light of this, I would suggest investors hold off an investment in Hydroponics Company despite today's news and wait to see how things develop.
I expect that by late next year the cream will rise to the top in the industry and it will become easier to pick out the winners and avoid the losers.
