These were the best performing ASX cannabis shares in October

These were the outperformers in the ASX cannabis shares basket in October.

| More on:
An older farmer wearing a checkered shirt and a straw hat stands in a green field of cannabis plants growing up to waist level as he smiles looking at his crop.

Image source: Getty Images

ASX cannabis shares were nothing short of a mixed bag last month. Several names did well but a large body of shares missed the benchmark completely.

For some context, the S&P/ASX 200 Health Care index (ASX: XHJ) regained steam over the course of last month. It came off a 3-month low to post a solid return of almost 5%. With that in mind, it was pleasing for investors to see several ASX cannabis shares lead the index.

So, without further delay, here are 3 of the best performing ASX cannabis shares in October.

Incannex Healthcare Ltd (ASX: IHL)

Shares in medicinal cannabis innovator Incannex climbed 34% in October, reaching a closing high of 47 cents at the end of the month. This was also a new 52-week high, with the share price coming off a low of 33 cents earlier in the month.

A suite of regulatory and company-specific tailwinds helped prop up the Incannex share price ahead of its peers.

For instance, it engaged drug manufacturer Procaps Laboratories S.A to develop its IHL-42X soft gel capsules. IHL-42X is Incannex’s proprietary cannabinoid formula and that is used to treat obstructive sleep apnoea (OSA). Incannex has filed patent protection in several jurisdictions for the drug.

In other news, studies have confirmed success in Incannex’s IHL-675A label. It has shown to be effective in reducing inflammatory-type symptoms in conditions like rheumatoid arthritis.

Incannex also filed for F-1 registration to list on the US NASDAQ exchange earlier in the year, which is akin to an initial public offering (IPO) in Australia.

Incannex shares have started the session poorly today, and are now trading 1% down at 52.5 cents apiece.

Creso Pharma Ltd (ASX: CPH)

After trading sideways for the majority of October, investors piled into Creso Pharma shares in the final days of the month after a suite of market updates.

The cannabis-focused biotech advised it had purchased Canadian life sciences entity ImpACTIVE for $217,000.

Creso intends to widen its territory in North America, seeking to penetrate those markets further with its product line.

Aside from this, Creso made a curious move in releasing a prospectus outlining the sale of bonus options to its shareholders.

Whilst the company stated this was in part a reward to shareholders for their support, it actually serves a deeper purpose. The options, if exercised in full, give Creso access to approximately $100 million in liquidity by earning 25 cents per option.

Not only that, the contracts are tradeable on any ASX exchange that permits derivatives trading. This gives investors the opportunity to participate in price discovery of these assets.

To cap off the month, Creso also reported its quarterly earnings, recognising a 92% year-on-year gain in revenue.

In early trading today, Creso Pharma shares are almost 4% higher at 14 cents each.

Althea Group Holdings Ltd (ASX: AGH)

Medicinal cannabis distributor Althea Group was also a net winner last month, with its share price rising 21%.

Despite no announcements from Althea early in the month, investors still bid up its share price from a low of 24 cents on 4 October.

Investors started buying in rapid succession, sending its share price north in almost vertical fashion over a 2-week period. The resulting 32% gain corresponded with the performance of the broader S&P/ASX 200 Health Care index.

Unfortunately for Althea shareholders, the steam was let out at express-pace after the company released its quarterly update.

Although it posted a record quarter with 116% year-on-year growth in customer receipts — up 57% on the prior quarter – investors were quick to exit their positions. This created a wave of selling pressure on Althea’s share price. It fell sharply by about 10% in the final 2 weeks of October.

The Althea share price is flat today at 27 cents.

A quick rundown on medicinal cannabis

There is no special type of cannabis plant (also known as marijuana) that is medical. Medicinal cannabis is just regular old cannabis.

Cannabis has been used as medicine for thousands of years in many cultures. It is only relatively recently that the plant has gained traction as a mainstream treatment for various ailments.

Medicinal cannabis production is highly regulated in order to comply with Australian medical standards. Our standards are (correctly so) some of the tightest in the world.

The plant’s primary active compounds are cannabinoids called delta-9 tetrahydrocannabinol (also known as THC), terpenes, and cannabidiol (CBD).

It is these three ingredients that contain the medicinal properties of the cannabis plant.

They work by binding to the body’s own cannabinoid receptor sites – yes, we have our own internal cannabinoid system – to produce a range of therapeutic effects. These include pain relief, anti-nausea and appetite enhancement.

They can even stabilise uncontrolled body movements in neurological disorders like Parkinson’s disease.

Should you invest $1,000 in ASX cannabis shares right now?

Before you consider ASX cannabis shares, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and ASX cannabis shares wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Cannabis Shares

two men in formal business clothing closely inspect a bud from a cannabis crop.
Cannabis Shares

ASX cannabis shares in spotlight amid COVID prevention research

Key points ASX cannabis shares could benefit from new COVID-fighting research Cannabidiol (CBD) has proven effective in mice Researchers hope …

Read more »

A farmer in a field of cannabis plants.
Share Gainers

Why is the Little Green Pharma (ASX:LGP) share price in the green today?

Key points Little Green Pharma made a key announcement regarding an exclusive distribution agreement in Greece. It is an exclusive …

Read more »

A graphic image of three upward pointing arrows with smoke coming from their bottoms, indicating the arrows are taking off just like the Althea share price today
Cannabis Shares

Here’s why the Althea (ASX:AGH) share price is rocketing 12% today

Key points Althea delivered a record performance during the second quarter Strong demand for pharmaceutical cannabis helped drive its growth …

Read more »

A farmer in a field of cannabis plants.
Share Gainers

These were the best-performing ASX cannabis shares in 2021

ASX cannabis shares were a mixed bag in 2021 with the broad sector showing weakness across the entire year. Several …

Read more »

a medical person in white coat, gloves and protective eyewear uses tools and a test tube to put cannabis buds into the tube for research purposes.
Share Gainers

Why is the Cronos (ASX:CAU) share price soaring 45% today?

The Cronos Australia Ltd (ASX: CAU) share price is up in orbit today, leaping 45% at one stage. At the …

Read more »

A graphic showing a rising share price in medical cannabis shares
Share Gainers

Here’s why the Incannex (ASX:IHL) share price spiked 12% today

Shares in medicinal cannabis company Incannex Healthcare Ltd (ASX: IHL) chugged along nicely on Tuesday to start off the ney year 12% …

Read more »

A white cannabis leaf set against a green background with a graph going up, indicating a rising share price for ASX cannabis shares
Cannabis Shares

What’s the outlook for ASX Cannabis shares in 2022?

Shares in the ASX cannabis sector have had another difficult time in December, as most majors come in well behind …

Read more »

Falling cannabis asx share price represented by cannabis leaves on a declining line graph
Cannabis Shares

What’s dragging the Incannex (ASX:IHL) share price 5% lower today?

The Incannex Healthcare Ltd (ASX: IHL) share price is in the red today after a company update on its potential NASDAQ listing. …

Read more »