These were the best-performing ASX cannabis shares in 2021

Despite a mixed bag for cannabis shares, some ended the year on a high

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ASX cannabis shares were a mixed bag in 2021 with the broad sector showing weakness across the entire year. Several of the majors underperformed, while key players continued to sprout through.

Checking the trade quotes for cannabis stocks listed on the Australian exchanges, it's abundantly clear most names are swimming in a sea of red across all time frames.

Yet, despite the broad-sector weakness, there were still pockets of green littered throughout the ASX cannabis space last year.

With 2022 now well underway, let's look back and observe some of the top-performing ASX cannabis shares in 2021.

Cronos Australia Ltd (ASX: CAU)

Shares in medicinal cannabinoid player Cronos continued charging higher in 2021 and bounced from a low of 10.5 cents in September to close the year at 20 cents.

The company advised of a key update back in December that is likely to be of critical importance to operations from 2022.

Mid-month Cronos announced it had completed its merger with CDA Health Pty Ltd. Pursuant to the merger, four directors of Cronos handed in their resignations and new directors have been appointed.

The company paid $5 million in cash and issued a total of 403,552,399 ordinary shares to CDA shareholders and has consideration to purchase of 100% of the shares in CDA Health.

As a result, CDA Health is now a wholly owned subsidiary of Cronos Australia. Former shareholders of CDA Health now own approximately 74% of Cronos Australia's issued capital (on an undiluted basis).

The new entity is forecasted to deliver proforma FY21 revenue of $23.1 million ‚Ästup from $4.6 million the year prior. However, the cost of these revenues is expected to widen to over $15 million from $2.58 million in FY20.

Cronos finished the year 54% higher after gaining support towards the the back end of the year. Its shares are now trading at 29 cents apiece.

Incannex Healthcare Ltd (ASX: IHL)

Shares in medicinal ASX cannabis company Incannex Healthcare recovered from downward pressure in December and finished the year well in the green.

Investors who held Incannex for the entirety of 2021 saw their holdings increase by more than 294%, only dipping along the way alongside broad-sector weakness.

Investors weren't moved after Incannex advised it is in a position to conduct its offering of American Depositary Receipts (ADIs) in January 2022.

The date finally arrives after a lengthy and intense period taken to address concerns the US Securities and Exchange Commission raised alongside other regulatory headwinds. Incannex's listed ADSs will trade under the ticker symbol "IXHL", on the Nasdaq.

CEO and managing director of Incannex Healthcare, Joel Latham, said it was a "momentous year for Incannex" in 2021 with six research and development programs that "continue to progress rapidly".

The company also noted dosing of participants in its phase 2, proof-of-concept clinical trial for IHL-42X is complete.

The trial is investigating novel cannabinoid combination product, IHL-42X, for the treatment of obstructive sleep apnoea (OSA).

All participants in the phase 2 trial have now completed the treatment periods. Data is in the hands of Novotech, a contract research organisation. Delivery of the final clinical study report is anticipated in Q1 2022.

Emyria Ltd (ASX: EMD)

Emyria was another outperformer in 2021 with shares soaring almost 330% from a base of 9 cents. Shares traded as high as 49.5 cents at one point before finishing the year at 38.5 cents apiece.

Looking at the chart across the year, shares in the cannabis company were trading flat until they popped in late November.

Investors piled into the company after it announced a strategic investment at that time. The investment was a vote of confidence for the company seeing as it was made by one of Australia's largest private investment groups, Tattarang.

Tattarang is the brainchild of Australian billionaire and recent renewables energy juggernaut Andrew 'Twiggy' Forrest AO, chairman and founder of Fortescue Metals Group Limited (ASX: FMG).

Tattarang invested $5 million via a share placement at a price of 25 cents apiece, giving the investment firm a 7.3% stake in Emyria.

Funds raised will be put towards its synthetic cannabinoid programs with the Therapeutic Goods Administration (TGA) and the US Food and Drug Administration (FDA).

The company will also expand its novel MDMA-analogue treatment alongside the University of Western Australia.

The author 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.

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