Why this ASX cannabis share is rocketing 20% higher today

The Cann Group Ltd (ASX:CAN) share price is pushing higher on Thursday after the release of an update on its cannabis products development…

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In morning trade the Cann Group Ltd (ASX: CAN) share price is rocketing higher.

At the time of writing the cannabis company's shares are up 20% to 51 cents.

Why is the Cann Group share price rocketing higher?

Investors have been buying Cann Group's shares after it released an update on the medicinal cannabis products it is manufacturing with IDT Australia Limited (ASX: IDT).

According to the release, the first commercial medicinal cannabis product from its Australian-based cultivation operations has been packed by IDT Australia under cGMP conditions.

It will now undergo stability testing ahead of release in the first quarter of 2020.

What is Cann Group producing?

Cann Group is packing medicinal cannabis dried flower into 10g bottles in IDT Australia's licensed cGMP manufacturing facilities.

This product will be made available to Australian patients early in 2020, who can access the product under the Special Access Scheme (SAS).

Cann Group has a national distribution arrangement with Symbion Health, which will ensure product is available via Symbion's extensive network of retail and hospital pharmacies.

The first commercial product will initially be utilised for Australian domestic requirements, but Cann Group has its eyes on international markets.

It notes that it recently completed its first export of Australian grown and packaged medicinal cannabis dry flower to Aurora Cannabis in Canada. Whilst this is strictly for research purposes, management feels it is an important validation of export pathways ahead of future commercial supply.

Cann Group CEO, Peter Crock, believes this represents a significant milestone in the commercialisation phase of the business.

He said: "IDT has demonstrated a clear capability to manufacture cGMP medicinal cannabis products. As Cann Group increases our cultivation and production capacity at the new Mildura facility, it is critical that we have the ability to efficiently convert that material into commercial formulations."

Things certainly are heating up in the industry. Earlier this week AusCann Group Holdings Ltd (ASX: AC8) announced the impending release of its first cannabis products.

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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