Why these cannabis shares smoked the market on Tuesday

Cannabis shares BOD Australia Ltd (ASX:BDA), Hydroponics Company Ltd (ASX:THC), and MGC Pharmaceuticals Ltd (ASX:MXC) smoked the market on Tuesday…

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It certainly was a positive day for the cannabis industry with a large number of cannabis-focused shares rising strongly on Tuesday.

While the bigger names such as Althea Group Holdings Limited (ASX: AGH), Auscann Group Holdings Ltd (ASX: AC8), and Cann Group Ltd (ASX: CAN) rose between 1% and 3% ahead of Canada legalising recreational cannabis on Wednesday, they weren't the biggest movers in the industry.

Three cannabis shares that performed especially well on Tuesday are listed below. Here's why they smoked the market:

The BOD Australia Ltd (ASX: BDA) share price jumped 12% to 60 cents. This morning BOD announced that it has successfully dosed its ECs315 cannabis extract in a sublingual wafer. This demonstrates that CBD can be delivered into a patient's bloodstream using its patented wafer system. Management believes this provides a proof of concept for BOD's cannabis sublingual wafer delivery system. According to the release, the trial will now be progressed to assess absorption rates of the wafer compared to other delivery methods and products.

The Hydroponics Company Ltd (ASX: THC) share price rose 12% to 61.5 cents after the cannabis company announced that it was well-positioned to benefit from the legalisation of recreational cannabis in Canada. According to the release, its main focus will remain on revenue generation from its global medicinal cannabis operations. But management believes its Canada-based Crystal Mountain business is well-positioned to take advantage of the rapidly changing cannabis market and growth in personal indoor farming. Crystal Mountain manufactures and distributes hydroponic equipment and supplies, with Canada being its principal market.

The MGC Pharmaceuticals Ltd (ASX: MXC) share price rocketed 25.5% higher to 7.9 cents before being placed into a trading halt in late trade. Management requested the trading halt so that it could respond to a Price Query from the ASX. It is unclear why investors have been suddenly picking up shares in a hurry today, however, last week its shares rallied higher after it received formal authorisation for the availability of its product CannEpil for supply in Australia through specialist prescribers under the Authorised Prescriber Scheme. CannEpil is a CBD-based medication that is used as a treatment for people with refractory epilepsy.

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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