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Why this ASX cannabis share rocketed 28% higher today

The Cann Group Ltd (ASX: CAN) share price was the best performer on the All Ordinaries index on Monday before being placed in a trading halt.

The cannabis company’s shares were up as much as 28% to $1.03 at one stage today. And were 25.5% higher at $1.01 when the trading halt came into place.

This latest gain means that Cann Group’s shares are now up a massive 120% since this time last month. Though, its shares are still down a sizeable 60% from their 52-week high.

Why is the Cann Group share price in a trading halt?

This afternoon Cann Group requested a trading halt pending the release of an announcement to the market.

This announcement is in relation to an update on the company’s manufacturing progress.

Cann requested that the trading halt remain in place until the earlier of the commencement of trading on Tuesday or the time it releases its announcement.

This pending announcement could relate to the release of a joint announcement (no pun intended) last month with its manufacturing partner, IDT Australia Limited (ASX: IDT).

That announcement revealed that the first commercial medicinal cannabis product to be produced from Cann Group’s Australian-based cultivation operations has been packed by IDT under cGMP conditions.

It was due to undergo stability testing ahead of a potential release in the first quarter of calendar year 2020.

I suspect that the stability testing may have gone to plan and the product could be ready for release now. Though, if this proves to be the case, today’s share price gain hints that this news leaked out early.

Elsewhere in the industry today, the Althea Group Holdings Ltd (ASX: AGH) share price is up over 8% on no news and the AusCann Group Holdings Ltd (ASX: AC8) share price has risen almost 2.5%.

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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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