Why are these 2 ASX cannabis stocks sputtering today?

Up 174% in 2023, this ASX cannabis share is giving back some more of its gains today.

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Two ASX cannabis shares aren't joining in the broader market rally today.

During the Tuesday lunch hour, the All Ordinaries Index (ASX: XAO) is up 0.5%.

But cannabis stocks Little Green Pharma Ltd (ASX: LGP) and Botanix Pharmaceuticals Ltd (ASX: BOT) remain mired in the red.

Both ASX cannabis stocks released quarterly updates today.

Here's what they reported.

Little Green Pharma share price falters amid European sales slump

Shares in vertically integrated medicinal cannabis business Little Green Pharma are down 3.1% today, trading for 15.5 cents apiece.

The ASX cannabis stock reported quarterly revenue of $6.2 million, in line with the prior quarter.

Cash receipts of $6.6 million were also consistent with the prior quarter. The company noted it also had a further $1.8 million in trade receivables at the end of the quarter.

While revenue in Australia increased 5% quarter on quarter, the ASX cannabis stock could be facing some pressure following a 33% decline in its sales into Europe. However, the company said it expects strong demand out of France, citing an additional 7,000 units of oil sent during the quarter.

As for the balance sheet, Little Green Pharma had cash in bank of $6.2 million and long-term debt of $3.6 million as at 30 September.

Which brings us to…

ASX cannabis stock slips amid ongoing FDA approval process

Shares in clinical-stage cannabinoid therapeutics company Botanix Pharmaceuticals are also lagging the benchmark today, down 1.8%, following its quarterly update.

On September 20, the Botanix share price was up an eye-popping 300% year to date amid hopes of pending United States FDA approval for its Sofpironium Bromide product, intended to treat excessive sweating. But due to issues with its packaging instructions, that approval was denied. Shares have slumped 32% since then, leaving the stock up 174% in 2023.

Botanix is resubmitting for approval. The company said its submission of the final required component is on target for the first quarter of 2024, with approval targeted by mid-2024.

But investors look to be holding off on hitting the buy button on this ASX cannabis stock until there's more certainty from the FDA.

The quarter gone by also saw Botanix raise $12.5 million via an institutional placement to new and existing shareholders.

On the balance sheet, the company ended the quarter with cash holdings of $6.8 million. Management also expects around $2 million from the R&D tax return in November.

Motley Fool contributor Bernd Struben 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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