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Australian medicinal cannabis industry Q1 update

It certainly was an eventful first-quarter of 2018 for the medicinal cannabis industry.

Thanks to the government lifting the ban on medicinal cannabis exports, a number of cannabis shares finished the quarter with strong gains.

Here’s what you need to know:

The Auscann Group Holdings Ltd (ASX: AC8) share price has surged 81% higher since the start of the year. Investors appear to believe that AusCann is one of the best positioned cannabis companies to profit from the regulatory changes. Its strong ties with C$6 billion cannabis giant Canopy Growth Corp certainly will help.

The Botanix Pharmaceuticals Ltd (ASX: BOT) share price is up 71% year-to-date. The main catalyst for this gain has been the company’s successful trials of its acne treatment product. The promising results allowed the company to raise $15 million through an institutional placement. The funds raised will be used to accelerate clinical development of its lead product, BTX 1503, and progress other key pipeline products.

The Cann Group Ltd (ASX: CAN) share price has climbed 4% so far in 2018. Like AusCann, Cann is seen as another company that could profit greatly from recent regulatory changes. After all, the company has significant growing capabilities at its facilities in Victoria. I suspect its shares haven’t climbed as much in 2018 due to their sizeable gains last year.

The Cannpal Animal Therapeutics Ltd (ASX: CP1) share price is 10% higher year-to-date. Last month this animal health-focused cannabis company advised that it has successfully imported cannabis oils for the clinical trial of its lead drug candidate, CPAT-01. CPAT-01 is a cannabis-derived medicine being developed as a treatment for pain in companion animals. Management estimates the market to be worth US$1.4 billion per year.

The Creso Pharma Ltd (ASX: CPH) share price has been an exception and is down 22% since the start of the year. Like Cann Group, Creso Pharma’s shares went gangbusters in 2017. This appears to have led to its shares coming under pressure from profit taking this year. 2018 looks likely to be a big year for Creso after the launch of a multitude of new products.

The MMJ Phytotech Ltd (ASX: MMJ) share price has also failed to follow the industry higher and is down 18% year-to-date. A number of sudden changes in the C-suite appear to have spooked the market.

The Hydroponics Company Ltd (ASX: THC) share price has fallen 26% so far this year. Like MMJ Phytotech, Hydroponics Company has also seen a change at the top. Last month its CEO David Radford handed in his resignation out of the blue a day after the departure of its chief commercial officer.

The Zelda Therapeutics Ltd (ASX: ZLD) share price is 11% higher year-to-date. Last month Zelda announced the expansion of its pre-clinical pancreatic cancer research collaboration with Curtin University. New research activities will include animal model studies that will be pivotal to facilitating future human clinical trials.

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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 Scott Phillips.

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