It certainly has been a disappointing week for anyone that has invested in ASX cannabis shares.
No less than four ASX cannabis shares sank to 52-week lows or worse on Thursday. Here's why investors are dumping their shares:
AusCann Group Holdings Ltd (ASX: AC8)
The AusCann Group share price sank to an all-time low of 18 cents on Thursday. This share price is even lower than the price the cannabis company listed at back in 2017. Investors appear to have been selling its shares due to concerns over the state of the global cannabis industry. An oversupply of cannabis is weighing on prices and sentiment. In addition to this, the Australian market is proving to be extremely competitive and the revenues being generated have not yet been meaningful for many of its peers.
Cann Global Ltd (ASX: CGB)
The Cann Global share price fell to an all-time low of 1.5 cents yesterday. As with AusCann, investors appear doubtful that Cann Global will ever generate meaningful revenues due to the increasing competition in the local cannabis market. Cann Global used to be a mining company called Queensland Bauxite, but switched to cannabis out of the blue in 2017.
Creso Pharma Ltd (ASX: CPH)
The Creso Pharma share price tumbled to a record-low of 14 cents on Thursday. Investors have been selling Creso Pharma's shares following the collapse of its takeover approach by PharmaCielo. It now looks to be in a very precarious position with a limited cash balance that I feel is unlikely for it to take long to burn through.
Elixinol Global Ltd (ASX: EXL)
The Elixinol Global share price fell to an all-time low of 93 cents. After being on fire at the start of the year, it has been nothing but down for this cannabis company in recent months. Although Elixinol Global has generated reasonable revenues this year, it has been investing very heavily to get there. This has seen the company burn through its cash balance at a very quick rate. Also likely to weigh on its shares is news of a potential class action that will be served against its US subsidiary. This class action relates to allegations that its products in the United States are mislabelled.