The ASX cannabis sector had its growth clipped in FY22 with plenty of shares declining in the financial year.
These trends have spilled over into the new financial year. On the charts, ASX cannabis shares are taking an absolute hammering.
Let's take a look.
Industry growth trends bode well for ASX cannabis shares
All growing puns aside, Australia's cannabis sector has been poised to grow by more than 80% year over year in CY22.
This growth could generate sales of more than $420 million, according to research conducted by FreshLeaf analytics, which has been researching Australia's cannabis industry since 2017.
The report, not freely available, said consumer trends are shifting to acceptance of medicinal cannabis use. Access is also improving for patients.
It also said that "psychedelics are a big part of a new future growth narrative," adding that government support will continue to play a large role through "down-scheduling".
Meanwhile, the Australian legal cannabis market was sized at $75 million in 2021.
"Increased use of marijuana, mostly for medical purposes, is boosting total market growth as customers migrate from traditional treatment methods to cannabis-based treatment," the report noted.
With growth potential on the horizon, this could weigh positively for several beaten-down ASX cannabis shares. These include Incannex Healthcare Ltd (ASX: IHL), Emyria Ltd (ASX: EMD) and Cronos Australia Ltd (ASX: CAU).
The returns of these ASX shares are shown below