Why cannabis company MGC Pharmaceuticals Ltd (ASX:MXC) rocketed higher today

One of the best performers on the market on Friday has been the MGC Pharmaceuticals Ltd (ASX: MXC) share price.

The diversified cannabis company’s shares returned from their trading halt and were up as much as 14% in early trade.

They have since given back some of these gains, but still sit 9.5% higher at 6.9 cents at the time of writing.

Why are MGC Pharmaceuticals’ shares rocketing higher?

This morning the company announced that it has received its Good Manufacturing Practice (GMP) certification and formal manufacturing licence to produce GMP grade medical cannabis medicines containing THC and CBD active pharmaceutical ingredients at its European production and compounding facility.

This means that MGC Pharmaceuticals can immediately commence production under this manufacturing licence for pharmaceutical grade products at its facility which is regarded as one of the most advanced in Europe.

The next step for the company will be to commence its full-scale manufacturing operation of its CannEpil product for final, independent validation before exportation into Australasia and Europe.

CannEpil is a drug-resistant epilepsy medication aiming to help an estimated 15 million people worldwide suffering from refractory epilepsy.

Should you invest?

While this is great news for MGC Pharmaceuticals and the company could soon have another source of revenue complementing its revenue-generating cannabis cosmetics business, I would still suggest investors show caution.

Competition in the sector is high with the likes of AusCann Group Holdings Ltd (ASX: AC8), Cann Group Ltd (ASX: CAN) and Creso Pharma Ltd (ASX: CPH) all targeting similar areas of the market. And at this stage it is difficult to know which companies will succeed and which will be left behind.

As such, I think investors ought to keep it on their watchlists for now.

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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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