Why this ASX cannabis stock rocketed 13% higher yesterday

ASX cannabis stock THC Global Group Ltd (ASX: THC) is surging higher on the ASX this morning after receiving a new manufacturing license.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares in ASX cannabis stock THC Global Group Ltd (ASX: THC) rocketed 13.70% higher in yesterday's trade after a manufacturing update.

What moved the ASX cannabis stock yesterday?

THC's share price jumped after receiving a manufacture permit for its Southport Manufacturing Facility Monday morning. The ASX cannabis company is now able to accept medicinal cannabis plant material from any Australian licensed and permitted cultivator. This include THC's own cultivation facilities, which allows it to commence production of Australian medicinal cannabis medicines.

The Aussie cannabis company said it now has the largest extraction capacity for medicinal cannabis in the country. THC's Southport Facility is the largest pharmaceutical bio-floral extraction facility in the Southern Hemisphere.

The ASX cannabis stock surged 13.70% higher to $0.42 per share after making the next big step in the lucrative market. THC has the capacity to support a minimum of 250,000 Australian patients with excess capacity for the global export market.

Packaged and bulk medicinal cannabis can be produced from the Southport Facility with product validation expected to begin shortly and be completed in December.

How has the THC share price performed in 2019?

It's been a difficult year for ASX cannabis stocks and THC has been no exception. The THC share price is down 10.64% even with yesterday's jump in the company's shares.

THC shares fell to a 52-week low last week as competition intensifies and earnings remain low. Fellow Aussie cannabis stock Cann Global Ltd (ASX: CGB) is also down 33% to $0.020 since relisting on 23 August. 

One factor working against the cannabis stocks is small market capitalisation (generally under the $100 million mark). This makes these stocks hugely susceptible to movements in the market given the speculative nature of these investments.

However, the ASX cannabis stocks climbed higher yesterday morning for several reasons, which could be a boost for shareholders.

Motley Fool contributor Kenneth Hall 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.

More on Share Gainers

A beautiful ocean vista is shown with a woman whose back is to the camera holding her arms up in triumph as she stands at the top of a rock feeling thrilled that ASX 200 shares are reaching multi-year high prices today
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX had a very pleasant end to the trading week this Friday.

Read more »

A woman holds her hand out under a graphic hologram image of a human brain with brightly lit segments and section points.
Share Gainers

The Brainchip share price is up 213% this month. Is Nvidia to blame?

The small cap Aussie tech stock is going bananas in 2024.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Aussie Broadband, Australian Ethical, Jumbo, and Vulcan are racing higher

These ASX shares are ending the week on a high. But why?

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Share Gainers

Why Bega Cheese, Domino's, Lovisa, and Universal Store shares are rocketing today

These ASX shares are catching the eye on Thursday. But why?

Read more »

A smiling man at a shop counter takes payment from a female customer, with racks of plants in the background.
Share Gainers

The Wesfarmers share price is rising again. Should I buy the stock now?

The conglomerate reported warmly received results last week and announced a large dividend.

Read more »

Shot of a young scientist using a digital tablet while working in a lab.
Share Gainers

If you'd put $20,000 in this ASX healthcare stock during COVID-19, you'd have $257,000 now

You could have become filthy rich in just 4 years. Just think about that.

Read more »

three businessmen high five each other outside an office building with graphic images of graphs and metrics superimposed on the shot.
Share Gainers

Why Codan, Domino's, Lottery Corp, and Wisetech shares are storming higher today

These ASX shares are avoiding the market weakness today. But why?

Read more »

The silhouettes of ten people holding hands with their arms raised against the sky, as the sun rises or sets in the background.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors endured a mildly negative session on the stock market this Tuesday.

Read more »