Why the Queensland Bauxite Ltd share price stormed 20% higher today

The Queensland Bauxite Ltd (ASX: QBL) share price is having a strong day ahead of the Christmas break.

In morning trade the bauxite miner and medicinal cannabis company’s shares are up 20% to 6 cents.

What happened?

Once again, today’s move higher has nothing to do with bauxite and everything to do with its interest in the medicinal cannabis sector through its Medical Cannabis Limited business.

According to an announcement out of the company this morning, it has signed an agreement with Algae Tec Ltd (ASX: AEB) to exclusively license Medical Cannabis’ low THC Delta 9 cultivars from its unique Australian Cannabis seed bank.

Algae Tec will look to establish a breeding program to identify cultivars for use in cannabinoid product development to research and develop stock and veterinary medications, supplements, and sophisticated animal therapeutics.

This brings the company into direct competition with fellow pot stocks Creso Pharma Ltd (ASX: CPH) and Cannpal Animal Therapeutics Ltd (ASX: CP1) which are also active in the companion animal health space.

Algae Tec’s shares are up 25% on the news.

Should you invest?

I wouldn’t be in a rush to invest in either Queensland Bauxite or Algae Tec just yet. Whilst there is a huge opportunity in the veterinary market, I feel other pot stocks are better positioned to challenge the current status quo.

But it may be worthwhile keeping a close eye on the company next year, despite how odd the bauxite-cannabis mix is.

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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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