The Ecofibre Limited (ASX: EOF) share price soared 24.3% yesterday to set a new record share price for the recently-listed cannabis company.
What caused the Ecofibre share price to surge?
With no company-specific news being released yesterday, it's possible that this was simply a function of high-frequency or technical traders jumping on board the stock.
Ecofibre is an industrial hemp company which is looking to ride the potential growth in hemp markets in Australia and the United States.
The company's headline product is Hemp Black which focuses on innovative solutions across a number of consumer markets to leverage the company's hemp technology and capitalise across several different markets.
Ecofibre listed at $1 per share in its IPO and has since seen its share price rocket to $2.30 per share – a handy return of 35.3% from its first-day closing price of $1.70 per share in little more than a week.
What are Ecofibre's prospects like?
The company is backed by some pretty serious players in Australian equities and finance, with significant stakes being held by its multi-millionaire Chairman Barry Lambert and ex-Perpetual CEO, and current Ecofibre CEO, Eric Wang.
These two have a combined stake of ~40% and with deep experience in Australian business could potentially build a significant capital base for Ecofibre going forward.
Despite Ecofibre's short-term share price success, it's been an otherwise sluggish start to the year for many of the ASX cannabis stocks.
AusCann Group Holdings Ltd (ASX: AC8) and Creso Pharma Ltd (ASX: CPH) have seen their share prices fall 33.3% and 25.9%, respectively as these companies have looked to boost profitability and shore-up long-term revenue growth.
While it has been a broadly disappointing start for Aussie cannabis stock, this buy-rated stock could be the one that blows away the competition in the second half of the year.
