Why did this ASX cannabis share just rocket 46%?

This cannabis share has been given a major boost by regulators…

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A Cronos Australia farmer and ASX cannabis shares investor stands in a field of cannabis plants and smiles at the camera

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The Little Green Pharma Ltd (ASX: LGP) share price is smoking the market on Monday.

In afternoon trade, the ASX cannabis share is up 46% to 27 cents.

Why is this ASX cannabis share on fire?

Investors have been bidding the Little Green Pharma share price higher today after the company's psychedelics focused subsidiary, Reset Mind Sciences, was given a big boost from regulators.

According to the release, the Therapeutic Goods Administration (TGA) has decided to change the classification of psilocybin and MDMA to allow prescribing by authorised psychiatrists.

This means that Australia will become the first market in the world to recognise psychedelics as medicines and paves the way for the use of psilocybin for the treatment of treatment resistant depression and MDMA for PTSD outside of a clinical trial environment from 1 July 2023.

Management believes this uniquely positions Reset Mind Sciences given both its Schedule 9 licence and its impending clinical trial. These developments now allow the company to accelerate and implement its commercialisation plans far earlier than expected.

'Groundbreaking'

Reset Mind Sciences' CEO, Shaun Duffy, was very pleased with the news. He commented:

The announcement by the TGA is truly groundbreaking in the field of psychedelics and I welcome their decision. There is a significant body of research emerging in Australia and globally for the use of psychedelics to treat mental health conditions and this decision allows the use of these drugs for the mental health conditions that have demonstrated the most potential in the research.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

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