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What are ASX cannabis shares?
Cannabis stocks are shares in companies that cultivate, distribute, and sell cannabis and cannabis products. Most cannabis shares on the ASX are focused on medical cannabis and include pharmaceutical and healthcare companies like Vitura Health Ltd (ASX: VIT) and Incannex Healthcare Ltd (ASX: IHL).
It has been legal to grow cannabis for medical and scientific purposes in Australia since 2016. Since legal access pathways were established, approvals for medicinal cannabis products have grown substantially — by the end of 2023, there were over 963,000 approvals under the Authorised Prescriber (AP) pathway and around 458,000 approvals under the Special Access Scheme Category B (SAS-B), with chronic pain and anxiety among the top indications1.
Recreational use and possession of marijuana remain illegal at the federal level. In November 2024, the federal parliament voted on a Greens-backed bill to legalise recreational cannabis nationally — the first time it had done so — but the bill was defeated 13 votes to 24. The ACT remains the only jurisdiction where adults may possess cannabis for personal use.
Despite this, the medical cannabis market has grown rapidly. Australians spent approximately AU$400 million on medicinal cannabis in the first half of 2024 alone — more than double the amount spent across the entirety of 20222. The Australian legal cannabis market was valued at USD$123.9 million in 2024 and is projected to reach USD$540.6 million by 2030, with a compound annual growth rate (CAGR) of 23.7%.
Should recreational legalisation eventually succeed, Australia's Parliamentary Budget Office estimates it could generate AUD$28 billion in tax revenue over the first decade, which is a prospect that could significantly boost returns for ASX cannabis investors.
Why invest in cannabis shares?
Investing in ASX cannabis shares exposes investors to the high growth Australian legal cannabis sector. The sector is experiencing high growth because it is still in its early stages. This means ASX cannabis stocks are still primarily speculative investments. They will appeal to investors with a higher risk tolerance who want to hold more of their investments in high-growth shares.
If the idea of big swings in the value of your investments makes you uncomfortable, cannabis shares may not be right for you. They are known to be volatile, and recent performance underscores the risk. As of April 2026, Vitura Health (ASX: VIT) had fallen 34% over the prior 12 months and 43% over two years, while the S&P/ASX 200 returned 0.49% and 9.29% over those same periods. Incannex Healthcare (ASX: IHL) has fared even worse, with its share price underperforming the ASX All Ordinaries by more than 70% over the past six months and trading more than 60% below its 200-day moving average.
The sector also faces structural risks. The experience in Canada serves as a cautionary tale — despite recreational legalisation, an oversupply of cannabis caused prices to collapse and companies expanded far more slowly than anticipated. A similar dynamic is already emerging in Australia, where domestic cultivators have raised concerns about being undercut by cheaper imports from Canada, where surplus product is being sold into the Australian market at low prices.
For investors who believe in the long-term outlook for the industry, these short-term headwinds may be easy to look past. But for those seeking more certainty in the near-term value of their portfolio, blue-chips may be a better fit than pot stocks.
Top cannabis stocks on the ASX
There are a handful of cannabis stocks on the ASX, including those with smaller market capitalisations such as Althea Group Holdings Ltd (ASX: AGH) and Auscann Group Holdings Ltd (ASX: AC8).
| Company | Description |
| Vitura Health Ltd (ASX: VIT) | Vitura operates a purpose-led portfolio of companies that work to bridge the gap in the medical cannabis market between doctors, suppliers, pharmacists, and patients |
| Incannex Healthcare Ltd (ASX: IHL) | Clinical-stage pharmaceutical development company undertaking programs for cannabinoid pharmaceutical products and psychedelic medicine therapies |
| Cann Group Ltd (ASX: CAN) | Medical marijuana company focused on breeding, cultivating, manufacturing, and supplying medicinal cannabis for sale within Australia and for approved export markets |
Vitura Health
Formerly Cronos Australia Limited, the company changed its name to Vitura Health Ltd (ASX: VIT) in February 2023 following its merger with CDA Health Pty Ltd. Since then, Vitura has grown through further acquisitions, evolving from a medicinal cannabis distributor into a diversified digital health business.
Vitura operates across several subsidiaries including CanView, Doctors on Demand, Cortexa, CDA Clinics, Cannadoc, BHC and Adaya. At the core of the business is the CanView platform, which sells and distributes 350+ therapeutic product and device SKUs within Australia, connected to over 4,000 registered pharmacies nationwide. Its clinic businesses — CDA Clinics, Cannadoc, and the newly acquired Candor Medical (purchased in February 2025 for $5.9 million) — collectively serve tens of thousands of patients through telehealth consultations, making Vitura one of Australia's largest medicinal cannabis clinic providers.
Doctors on Demand, acquired in October 2023 for $25 million, broadened the business further by adding a telehealth platform servicing around 280,000 patients per year across verticals including urgent care, men's and women's health, and weight management. Vitura also holds a 50% stake in Cortexa, a joint venture with Canada's PharmAla Biotech supplying GMP-certified psychedelics to clinicians and research sites. In FY2025, the company reported revenue of $124 million and earnings of $3.3 million.
Incannex
Incannex Healthcare (ASX: IHL, Nasdaq: IXHL) is a clinical-stage biopharmaceutical company developing combination medicines targeting the underlying biological pathways associated with chronic conditions. Its pipeline has narrowed and sharpened in focus since its earlier days, with three key programs now advancing through FDA clinical development.
The company's lead asset, IHL-42X, is an oral fixed-dose combination of dronabinol and acetazolamide being developed as a potential first-in-class treatment for obstructive sleep apnea (OSA) — a condition affecting an estimated one billion people globally with no currently approved oral pharmaceutical therapy. Phase 2 results delivered statistically significant reductions in the Apnea-Hypopnea Index of up to 83% from baseline, with an outstanding safety profile.
In December 2025, the FDA granted IHL-42X Fast Track designation, supporting an accelerated pathway toward a potential New Drug Application submission. Incannex is also advancing PSX-001, an oral synthetic psilocybin treatment for generalised anxiety disorder that delivered positive Phase 2 results, and IHL-675A, a cannabidiol and hydroxychloroquine combination targeting rheumatoid arthritis, which is approved for Phase 2 development.
As with all clinical-stage companies, significant risk remains — products must still clear late-stage trials and regulatory approval before reaching market. But with two successful Phase 2 readouts and FDA Fast Track status on its lead program, Incannex has made meaningful progress since its earlier, more speculative days.
Cann Group
Cann Group (ASX: CAN) focuses on breeding, cultivating, manufacturing, and supplying medicinal cannabis for sale within Australia and to approved export markets. The company operates world-class research, cultivation, and GMP manufacturing facilities in Melbourne, as well as a state-of-the-art large-scale cultivation and manufacturing facility near Mildura, Victoria. Its product portfolio includes a range of dried flower and oil products, active pharmaceutical ingredients and extracts, its proprietary Botanitech brand, and the Satipharm patent-protected capsule technology.
The Mildura facility has delivered meaningful production growth, with output reaching 4.43 tonnes for the year ended June 2024, up from 2.2 tonnes the prior year. In April 2025, Cann secured a supply agreement with Chemist Warehouse to distribute its Botanitech products through the pharmacy chain's Queensland network, a significant distribution milestone for the company.
However, Cann's financial position remains stretched. The company negotiated with its major lender, NAB, to defer interest payments and extend loan maturities, and as of late 2025, the company carried a net loss margin of nearly 169% against trailing revenues of $13.25 million. Cann Group remains a high-risk, high-potential investment whose long-term viability is closely tied to its ability to grow revenue from the Mildura facility fast enough to service its significant debt load.
What might the future hold for ASX cannabis shares?
The Australian medicinal cannabis market has grown dramatically since the first prescriptions were issued in 2016. Prescription numbers surged from just 231 in 2017 to more than one million by early 2024, and in 2024 alone, 923,356 prescriptions were issued — up 11% year-on-year — with 3,244 authorised prescribers now registered across the country3.
Domestic supply remains a structural challenge. Cannabis imports grew 959% between 2021 and 2024, with Canada supplying around 80% of the total. Local cultivation is expanding but competing on price against Canadian suppliers continues to weigh on ASX-listed cultivators4.
The push for broader legalisation continues despite the federal bill being voted down in November 2024. A Roy Morgan poll of over 69,000 Australians conducted between April 2024 and March 2025 found 48% supported legalising marijuana, with majority support among all Australians aged 18 to 495. The 2022–2023 National Drug Strategy Household Survey found that 80% of Australians do not believe cannabis possession should be a criminal offence, and independent costings released in March 2025 estimated legalisation could generate $700 million per year for the federal budget.6
In addition, a report from the Penington Institute in Melbourne indicated that Australian taxpayers would save approximately $850 million per year if cannabis were decriminalised.7 With public opinion continuing to shift, the legislative landscape may look quite different within the next decade.
Pros of investing in ASX cannabis stocks
Huge growth potential: The global cannabis market is still in its early stages, meaning the growth opportunities are truly enormous. If Australia moves ahead with legalisation, the market could grow at a fast clip.
Adoption in medical settings: As cannabis becomes more ubiquitous and laws are relaxed, biotechnology companies may find more uses for medical marijuana. This could rapidly expand the medicinal cannabis market, even if the recreational market hits some legal roadblocks.
And the cons?
High risk: With a high potential reward, there usually comes a lot of risk. Because the legal cannabis market is still so young, analysts are yet to fully understand how it will behave. Current estimates of growth rates are just that – estimates – and there is no guarantee the market will grow as fast as predicted.
Not all companies will make it: If we take Canada as an example, oversupply led to price falls, eventually squeezing smaller companies' profits. Not all companies will survive. It might be wise to spread your investment across a few different cannabis shares to mitigate some of this risk rather than putting all your eggs in one basket.
Risks from regulation and legislation: So much of the growth runway for the global cannabis industry depends on favourable treatment from governments and regulators. There is always the risk that governments may crack down on cannabis use or reverse previous law changes.
Are ASX cannabis shares a good investment?
ASX marijuana stocks are still somewhat risky, speculative investments. Therefore, you should carefully consider your financial situation and risk tolerance before investing in them. Pot stocks may not fit within your investment strategy if you have a low-risk tolerance, are nearing retirement, or are only planning to invest over a short timeframe.
However, if you are bullish on the long-term outlook for the cannabis industry and you can afford to ride out some volatility in the short term, then cannabis shares may appeal to you. It's still early days in Australia's cannabis industry, but as the world changes its view on the drug, it's clear that Australia's perspectives are also adjusting.
Given the risk involved, it's still probably wise to allocate only a small portion of your portfolio towards pot stocks. And, if you can, spread your investment out over multiple cannabis shares to mitigate the risk that one of them might go belly-up.
- With additional reporting by Motley Fool contributor Katherine O'Brien
