Why this ASX cannabis share surged higher today

The Althea Group Holdings Ltd (ASX:AGH) share price has surged higher after releasing its first quarter update…

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The Althea Group Holdings Ltd (ASX: AGH) share price has been a positive performer on Wednesday.

In morning trade the cannabis company's shares are up 8% to 68.5 cents.

Why is the Althea share price on the rise?

This morning Althea released its first quarter update which revealed a strong increase in revenue.

According to the release, Althea posted unaudited revenue of $755,385 for the quarter ending September 30. This was a 184% quarter on quarter increase, albeit from a very small base.

This revenue was driven by a strong increase in patients being prescribed Althea medicinal cannabis products. At the end of the period 2,329 patients had been prescribed Althea medicinal cannabis products, which was a quarter on quarter increase of 55%.

This number has continued to grow since the end of the quarter and currently sits at 2,557 patients.

Positive growth has also been achieved in respect to Health Care Professionals (HCPs) prescribing its products. At the last count, there were 334 HCPs on board.

Peak business.

In addition to this, the company provided an update on its recently acquired Peak business. It advised that it has entered into a Letter of Intent with Wildleaf Ventures. This is for the contract manufacture and distribution of its cannabis-infused beverages throughout Canada.

Though, it is worth remembering that a Letter of Intent is not binding. As such, I would suggest investor disregard this until something more concrete is announced along with its terms.

Althea's CEO, Josh Fegan, appeared to be pleased with the company's performance during the first quarter.

He said: "We are very pleased with what was another successful quarter for Althea. With strong growth across key metrics at home and accelerating expansion abroad, we feel that we are well-positioned to become a global leader in the supply of high-quality, pharmaceutical-grade medicinal cannabis products."

"With cannabis 2.0 about to come into effect in Canada, we also believe that Peak is well positioned to achieve Health Canada licencing in early 2020 and, judging by customer interest, will certainly hit the ground running with production. I'd like to take this opportunity to thank shareholders for their support of the Peak acquisition and Althea's continued growth," he added.

Elsewhere in the industry, this morning MGC Pharmaceuticals Ltd (ASX: MXC) announced that it has now passed the key milestone of 600 prescriptions in Australia and the United Kingdom. This is an increased from 400 at the end of September. Its shares have also surged higher this morning.

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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