How have ASX cannabis shares been performing so far in 2022?

The sector has held its own during volatile times.

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Key points

  • ASX cannabis shares have fared quite well through recent market volatility
  • Three names stand out over the last three months
  • All three have recorded healthy gains during the past year

While it hasn’t been immune to the big reset in Aussie markets, the cannabis sector has certainly remained buoyant this year.

Whilst most sectors have seen last year’s gains evaporate in 2022 so far, ASX cannabis shares appear to be flowering along nicely, with several names outstripping peers in adjacent markets.

Here are three standouts from the bunch.

Emyria Ltd (ASX: EMD)

Emyria has been busy these past few months – very busy. In February, the biotech advised it had expanded its proprietary MDMA analogue library with the University of Western Australia.

The following month, Emyria announced the launch of its “second highly bioavailable, ultra-pure CBD capsule, EMD-RX7”.

According to the company, “EMD-RX7 demonstrates more than 4 times the bioavailability (a measure of the amount of the drug reaching the bloodstream) compared to the only registered CBD oil – Epidyolex – in a recent pharmacokinetic animal study meaning lower doses may be required for clinical results.”

Last week, it provided more colour on its first ultra-pure CBD medicine, EMD–RX5. It said that patient dosing for a phase one clinical trial was completed and that preparations had been made for phase three pivotal trials as well.

At the time of writing, the Emyria share price is trading up 3.23% on the day at 32 cents. That takes its gains to 60% over the last 12 months.

Cronos Australia Ltd (ASX: CAU)

Shares in Cronos Australia have remained buoyant these past 12 months with a near 118% return. Shares are also up 52% this year to date to now trade at 30 cents.

In recent times, the big move for this cannabis player was its merger with CDA Health Pty Ltd back in December, placing the latter as a wholly-owned subsidiary of Cronos.

CEO Rodney Cocks said the merger will enable Cronos to “take the company to the next level of growth”.

In its most recent earnings release, Cronos printed cash receipts of $28.5 million and was net cash flow positive from operations (CFFO) with $9 million in CFFO for HY FY22.

It also mentioned that “[m]edicinal cannabis unit sales for the first half of FY2022 exceed unit sales for all of FY2021”.

Incannex Healthcare Ltd (ASX: IHL)

Shares in Incannex have also held returns over the last year, although have lost some of those gains in March. After some volatility, shares now rest at 46 cents apiece, after plunging from a high of 73 cents in March.

Investors had a tough time digesting the company’s news it executed a term sheet to acquire APIRx Pharmaceutical USA, LLC.

The price was US$93 million and Incanncex mentioned that it is budgeting $5-$10 million on product expenditure for APIRx in the first year of operation.

As TMF reported at the time, “the company claim[ed] it now has an expanded total addressable market (TAM) of more than US$400 billion annually.”

Since the announcement, shares have slipped hard and are down 31% in the past month of trade, but are up 77% in the last year.

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Motley Fool contributor Zach Bristow has no position 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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