This is a young industry that is largely dependent on the world's legal and medical fraternities to accept and approve medicinal cannabis as a treatment for many conditions and adjust laws accordingly.

The process for change in this regard is incredibly slow, which makes ASX cannabis shares very volatile.

Let's look at what's been happening lately.

News from the United States

Our Fool colleagues in the US report rising new excitement over cannabis stocks, but it's based purely on speculation.

There are two bits of news that have US cannabis shares investors excited.

Firstly, the US Department of Health has recommended a downgrade to the scheduling of marijuana from a Schedule 1 substance — the same category as heroin — to Schedule III.

The recommendation was issued late in August and follows an 11-month review.

The US Drug Enforcement Administration (DEA) defines Schedule III drugs as having a "moderate to low potential for physical and psychological dependence".

Nothing has happened as a result of the recommendation yet.

Meantime, a bipartisan group of US senators are pushing for state-legalised cannabis businesses to receive access to finance.

The group introduced the Secure and Fair Enforcement Regulation (SAFER) Banking Act in the Senate today, according to Bloomberg Law.

The bill has been around for a few years but has been held up at various points.

Its introduction in the Senate is good news, but nothing consequential for US or ASX cannabis shares has happened yet.

How are ASX cannabis shares performing of late?

US cannabis shares such as Aurora Cannabis Inc (NASDAQ: ACB) and Canopy Growth Corp (NASDAQ: CGC) have rocketed since news of the health department's recommendation broke on 30 August.

But not much has happened for ASX cannabis shares.

Over the same time period:

• Botanix Pharmaceuticals Ltd (ASX: BOT) shares have remained steady at 19 cents
• Cann Group Ltd (ASX: CAN) shares have fallen 7.7% to 12 cents
• Incannex Healthcare Ltd (ASX: IHL) shares have fallen 18.8% to 6.5 cents
• Ecofibre Ltd (ASX: EOF) shares have risen 17.7% to 20 cents
• Althea Group Holdings Ltd (ASX: AGH) shares have fallen 15% to 3.4 cents
• Little Green Pharma Ltd (ASX: LGP) shares have fallen 8.8% to 16 cents

As we covered, Botanix was in the news yesterday after the ASX issued a price query.

The Botanix share price hit a 52-week high of 21 cents, up an impressive 160% since the start of June.

Aussie news affecting ASX cannabis shares

Australia legalised medicinal marijuana in 2016.

Recreational use remains illegal except in the ACT.

In June, the Legalise Cannabis party introduced a bill in the Western Australia, Victoria, and New South Wales parliaments to legalise marijuana for personal use as well as medical reasons.

The bill is called the Regulation of Personal Adult Use of Cannabis Bill.

The Australian Therapeutic Goods Administration (TGA) down-classified two psychedelics to enable their use in treating mental illness in July.

The psychedelics are MDMA for post-traumatic stress disorder (PTSD) and psilocybin for treatment-resistant major depressive disorder.

Only a psychiatrist can prescribe them.

Reset Mind Sciences CEO Shaun Duffy said the TGA's decision was "truly groundbreaking".

Little Green Pharma said the TGA move meant Australia "will become the first market in the world to recognise psychedelics as medicines … ".

In August, we learned the Victorian Government will conduct an 18-month Australia-first trial to test medicinal cannabis users' driving abilities.

Current roadside drug testing laws allow police to test for the mere presence of tetrahydrocannabinol (THC).

Medicinal cannabis users argue that they are only ingesting tiny amounts of THC in their health therapies.

Therefore, the law should be updated to test for impairment rather than just presence.

Foolish takeaway

All of these small changes represent the slow-moving wheel of the cannabis industry's evolution.

For this reason, ASX cannabis shares remain highly speculative investments.

While some US cannabis stocks have surged on recent news, the same can't be said for ASX shares.

The post Could ASX cannabis shares be set for a resurgence? appeared first on The Motley Fool Australia.

The company also achieved its maiden monthly operating profit in March, and now expects its first quarter of profit in June.

Althea manufactures, sells, and distributes cannabis-based medicines and recreational products globally.

Shares in Althea are currently changing hands for 5.1 cents, 13.3% up on yesterday's close of 4.5 cents.

In earlier trading, they hit an intraday high of 5.7 cents, up 26.6%.

Let's look at the detail in the report.

Althea share price soars on 68% increase in sales

The company reported the following results for the three months to 31 March:

• $9.24 million in cash receipts, up 68% on the prior corresponding period (pcp)
• Net cash outflows of $1.63 million, down 24% pcp
• Cash and cash equivalents of $5.3 million as of 31 March

What happened to this ASX cannabis share in March?

Althea has two business divisions — recreational cannabis and pharmaceutical cannabis.

The company reported a record $5.15 million in receipts for recreational cannabis during the March quarter, up 57% compared to the December 2022 quarter.

It also reported a record $3.75 million in receipts for medicinal cannabis, up 11% on December.

Althea recorded its maiden monthly operating profit in the month of March.

The ASX cannabis share is flying today on this news and may get a further boost if the company makes good on its expectations of a maiden quarterly profit in June.

Althea also said operating expenses fell during the March quarter as a result of cost-cutting programs.

In other news during the quarter, Althea announced it had secured a CAD$2 million loan facility from lenders in Canada.

In addition, the company announced a further $2.2 million of convertible debt funding. This was provided by an institutional investor in the United States.

The ASX cannabis share fell by 16.7% between 1 January and 31 March.

The S&P/ASX All Ordinaries Index (ASX: XAO) rose by 2.1% over the same time frame.

'A landmark turning point' says CEO

Althea CEO Joshua Fegan said:

March 2023 was a landmark turning point for the Company as we achieved record monthly cash receipts and a maiden monthly operating profit.

To close out the Quarter with such a strong month (March) sets us up well for an expected substantial improvement in cash flow position, and a quarterly operating profit, for the final quarter of FY23.

The post Which ASX cannabis share is surging 27% on record quarterly results? appeared first on The Motley Fool Australia.

Althea is an ASX cannabis share. The company is focused on the manufacturing, sales, and distribution of cannabis-based medicines and recreational products around the world.

The share price jump follows Althea announcing a record result in its quarterly activities and cash flow report.

Althea share price rockets on record sales result

The company reported the following results for the three months to 30 June:

• Record quarter with $6.5 million in receipts, up 130% on the previous corresponding period (pcp)
• Net cash used for operating activities decreased by 50% during the quarter
• $22 million in receipts for FY22, up 113% on FY21
• $6.6 million cash on hand and no debt

In its statement, Althea said the FY22 result was achieved despite "serious macro headwinds throughout the year". This included prolonged COVID-19 restrictions — which prevented the sales team from calling on doctors — related staff impacts, and the floods in Queensland and northern NSW.

What happened in the June quarter?

Althea has two business divisions — recreational cannabis (through the wholly-owned subsidiary company Peak Processing Solutions) and pharmaceutical cannabis (Althea).

In June, the recreational division achieved a record $3.6 million in receipts. The global medicines-based pharma business bought in $2.9 million.

Althea said increased sales and strict cost controls led to a 50% reduction in the net cash used for operating activities during the quarter. Costs went down to an all-time low of $1.1 million.

What did management say?

Althea CEO Joshua Fegan said:

Both the quarterly and FY2022 results were the best yet for AGH. [..]. we are very pleased to now be approaching a cash flow positive position.

Peak is proving to be one of the most promising recreational cannabis businesses in North America, quickly establishing itself as the leading supplier of cannabis beverages in Canada within a year of commencing operations.

Althea managed to grow in all territories despite sub-optimal trading conditions over the last 12 months, with our sales team's access to doctors limited due to COVID-19 restrictions, impacting sales.

Althea continues to see very strong underlying demand for its cannabis-based medicines and aims this financial year to return to pre COVID-19 growth rates.

What's next for Althea?

Althea has a range of new products set for launch during the first quarter of FY23.

The company anticipates a "significantly higher level of sales activity across all territories in FY2023
as market access returns to pre-COVID-19 levels".

Althea has been investing in purchasing stock to ensure it can supply any increase in sales orders.

Althea is scaling its operations in the United Kingdom and Germany. It received product approval in Ireland in May.

The company is also cutting costs. It is currently finalising its annual review of operating expenditure and has identified approximately $1 million in annualised savings, mainly from corporate overheads.

Althea said these cost savings would be implemented in the current quarter.

The Althea share price has fallen 71% over the past 12 months. This compares with an 11% fall in the S&P/ASX All Ordinaries Index (ASX: XAO).

The post Why is the Althea share price up 20% in 4 days? appeared first on The Motley Fool Australia.

Four shares that are not letting that hold them back today are listed below. Here's why they are pushing higher:

Althea Group Holdings Ltd (ASX: AGH)

The Althea share price is up 19% to 9.5 cents. This morning the cannabis company released a trading update which revealed $22 million in receipts from customers for FY 2022. This is an increase of 113% from the previous year. This followed a record final quarter with $6.5 million in receipts from customers.

AnteoTech Ltd (ASX: ADO)

The AnteoTech share price is up 5% to 8.4 cents. This follows the announcement of positive test results from "two respected and recognised global companies operating in the lithium-ion battery (LIB) value chain" for its drop-in cross-linker additive for LIB anodes, AnteoX. The additive has driven an uplift in electrochemical performance for lithium batteries.

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is up almost 6% to $3.81. This is despite there being no news out of the coal miner today. Though, it is worth noting that coal prices had a positive finish to the week. This was possibly driven by China's stimulus plans.

Omni Bridgeway Ltd (ASX: OBL)

The Omni Bridgeway share price is up 3.5% to $3.86. This morning this litigation funder announced that it achieved annual commitments of $463 million for FY 2022. This is a record level and a 12% increase year-on-year. Management advised that the growth in commitments was achieved without any deterioration in the quality of underwriting or compression in margins.

The post Why Althea, AnteoTech, New Hope, and Omni Bridgeway shares are pushing higher appeared first on The Motley Fool Australia.

• Althea delivered a record performance during the second quarter
• Strong demand for pharmaceutical cannabis helped drive its growth
• Althea is still burning through its cash despite its sales growth

The Althea Group Holdings Ltd (ASX: AGH) share price is smoking the market on Thursday.

In late afternoon trade, the cannabis company's shares are up 12% to 23.5 cents.

Why is the Althea share price shooting higher today?

Investors have been bidding the Althea share price higher today following the release of a trading update.

According to the release, Althea recorded its best quarter ever with $5.5 million in receipts from customers for the three months ended 31 December. This was an increase of 107% from the prior corresponding period and an increase of 21% on the prior quarter.

A key driver of this growth was the company's pharmaceutical cannabis business. Its cash receipts totalled $2.8 million during the quarter, including a record $1.2 million for the month of December.

This means that receipts from customers for the first half of FY 2022 have reached a record of $9.9 million.

Another positive that could be lifting the Althea share price was a reduction in its expenditures. Management advised that its expenditure decreased by $354,000 during the quarter. This follows the completion of its previously announced business review.

However, this wasn't enough to stop Althea from burning through $2.5 million of cash during the quarter. This led to the company's cash balance falling from $12.735 million to $10.254 million.

Management commentary

Althea's CEO, Joshua Fegan, said:

Althea achieved a record $1.2 million in receipts from customers from pharmaceutical cannabis sales for the month of December 2021 – an increase of 56% from the prior month – as the business rebounded following the easing of various COVID-19 restrictions in place in Sydney and Melbourne, during the Reporting Period. Moving forward, we expect a stronger growth trajectory as more and more COVID-19 restrictions are removed, and patients return to visit their doctors as normal.

Peak continues to prosper as it cements itself as one of the leading manufacturers of recreational cannabis products in Canada. The achievement of the positive EBITDA milestone from its operations in the Canadian adult-use cannabis market is remarkable and somewhat unique to the sector, with the Company expecting to see fantastic results from the business in the months and years ahead, as it continues to forge greater market share across multiple product categories and foster strong brand partner relationships.

Despite today's strong gain, the Althea share price is down about 50% over the past 12 months.

The post Here's why the Althea (ASX:AGH) share price is rocketing 12% today appeared first on The Motley Fool Australia.

For some context, the S&P/ASX 200 Health Care index (ASX: XHJ) regained steam over the course of last month. It came off a 3-month low to post a solid return of almost 5%. With that in mind, it was pleasing for investors to see several ASX cannabis shares lead the index.

So, without further delay, here are 3 of the best performing ASX cannabis shares in October.

Incannex Healthcare Ltd (ASX: IHL)

Shares in medicinal cannabis innovator Incannex climbed 34% in October, reaching a closing high of 47 cents at the end of the month. This was also a new 52-week high, with the share price coming off a low of 33 cents earlier in the month.

A suite of regulatory and company-specific tailwinds helped prop up the Incannex share price ahead of its peers.

For instance, it engaged drug manufacturer Procaps Laboratories S.A to develop its IHL-42X soft gel capsules. IHL-42X is Incannex's proprietary cannabinoid formula and that is used to treat obstructive sleep apnoea (OSA). Incannex has filed patent protection in several jurisdictions for the drug.

In other news, studies have confirmed success in Incannex's IHL-675A label. It has shown to be effective in reducing inflammatory-type symptoms in conditions like rheumatoid arthritis.

Incannex also filed for F-1 registration to list on the US NASDAQ exchange earlier in the year, which is akin to an initial public offering (IPO) in Australia.

Incannex shares have started the session poorly today, and are now trading 1% down at 52.5 cents apiece.

Creso Pharma Ltd (ASX: CPH)

After trading sideways for the majority of October, investors piled into Creso Pharma shares in the final days of the month after a suite of market updates.

The cannabis-focused biotech advised it had purchased Canadian life sciences entity ImpACTIVE for $217,000.

Creso intends to widen its territory in North America, seeking to penetrate those markets further with its product line.

Aside from this, Creso made a curious move in releasing a prospectus outlining the sale of bonus options to its shareholders.

Whilst the company stated this was in part a reward to shareholders for their support, it actually serves a deeper purpose. The options, if exercised in full, give Creso access to approximately $100 million in liquidity by earning 25 cents per option.

Not only that, the contracts are tradeable on any ASX exchange that permits derivatives trading. This gives investors the opportunity to participate in price discovery of these assets.

To cap off the month, Creso also reported its quarterly earnings, recognising a 92% year-on-year gain in revenue.

In early trading today, Creso Pharma shares are almost 4% higher at 14 cents each.

Althea Group Holdings Ltd (ASX: AGH)

Medicinal cannabis distributor Althea Group was also a net winner last month, with its share price rising 21%.

Despite no announcements from Althea early in the month, investors still bid up its share price from a low of 24 cents on 4 October.

Investors started buying in rapid succession, sending its share price north in almost vertical fashion over a 2-week period. The resulting 32% gain corresponded with the performance of the broader S&P/ASX 200 Health Care index.

Unfortunately for Althea shareholders, the steam was let out at express-pace after the company released its quarterly update.

Although it posted a record quarter with 116% year-on-year growth in customer receipts — up 57% on the prior quarter – investors were quick to exit their positions. This created a wave of selling pressure on Althea's share price. It fell sharply by about 10% in the final 2 weeks of October.

The Althea share price is flat today at 27 cents.

A quick rundown on medicinal cannabis

There is no special type of cannabis plant (also known as marijuana) that is medical. Medicinal cannabis is just regular old cannabis.

Cannabis has been used as medicine for thousands of years in many cultures. It is only relatively recently that the plant has gained traction as a mainstream treatment for various ailments.

Medicinal cannabis production is highly regulated in order to comply with Australian medical standards. Our standards are (correctly so) some of the tightest in the world.

The plant's primary active compounds are cannabinoids called delta-9 tetrahydrocannabinol (also known as THC), terpenes, and cannabidiol (CBD).

It is these three ingredients that contain the medicinal properties of the cannabis plant.

They work by binding to the body's own cannabinoid receptor sites – yes, we have our own internal cannabinoid system – to produce a range of therapeutic effects. These include pain relief, anti-nausea and appetite enhancement.

They can even stabilise uncontrolled body movements in neurological disorders like Parkinson's disease.

The post These were the best performing ASX cannabis shares in October appeared first on The Motley Fool Australia.

The Cann Group Ltd (ASX: CAN) share price, for example, skyrocketed almost 300% between September 2017 and January 2018 amid the federal government allowing medicinal cannabis exports and booming M&A deals taking place across the sector.

Unfortunately, money came out of this sector as fast as it went in.

Fast forward to today, most ASX cannabis shares sit around multi-year, if not all-time lows. It isn't unusual to find players down 80-90% from their all-time highs.

Despite being beaten up and battered, these cannabis shares have managed to find somewhat of a floor in recent months.

While trading sideways for the past 1-2 months, this week has proven to be a small win for these beaten-up stocks.

The Cann Group share price is up 20.5% this week to a 3-month high of 34 cents.

Althea Group Holdings Ltd (ASX: AGH) is up 9.5% to a 2-month high of 29 cents.

Similarly, Ecofibre Ltd (ASX: EOF) is up 4.7% to a 4-month high of 89 cents.

Why ASX cannabis shares are bouncing higher?

ASX cannabis shares are likely taking off after a 7.1% jump in the Global X Cannabis Exchange Traded Fund (ETF) on Tuesday night.

The cannabis ETF invests in companies across the industry, involved in the legal production, growth and distribution of cannabis and industrial hemp.

Canadian and US-listed companies make up more than 90% of its allocation but the ETF does have a small allocation in Creso Pharma Ltd (ASX: CPH).

Last month, the Motley Fool US reported that a panel from the US House of Representatives is preparing for a vote to "federally legalise marijuana" outright.

This move will look to "decriminalise marijuana federally" in the US by removing it from the Controlled Substances Act.

The post Beaten up ASX cannabis shares showing signs of life appeared first on The Motley Fool Australia.

A subsidiary of Althea has entered into agreements with Boston Beer Company Inc (NYSE: SAM) to develop beverages.

Right now, the Althea share price is 26 cents, 8.51% higher than its previous close.

Let's take a closer look at the intriguing news from the medical cannabis producer and supplier.

Is green the new gold?

The Althea share price is gaining following news its subsidiary, Peak Processing Solutions, will be infusing drinks with cannabis.

Peak will work with The Boston Beer Company's subsidiary BBCCC to produce the non-alcoholic beverages. It will use cannabis from WeedMD Rx Inc, a subsidiary of Entourage Health Corp. The drinks will then be sold in Canada.

Under the agreement, BBCCC will provide Peak with US$2 million of funding to research and develop the products.

Peak will also receive a minimum of US$285,000 each year. Additionally, it will become the exclusive manufacturer of all cannabis beverages produced or sold in Canada under BBC branding for the duration of the 5-year agreement.

Entourage will supply all cannabis materials Peak needs to make the beverages and will buy the resulting products from Peak.

According to Althea, infused-cannabis beverage sales are growing and Peak has positioned itself as the leading producer in the category. Althea pointed to a recent report by Million Insights which estimated the cannabis beverage market will be worth US$2.8 billion in 2025.

Commentary from management

Althea's CEO, Josh Fegan, commented on the news driving the company's share price today, saying:

This project is further validation of Peak's significant and unique capabilities in the recreational cannabis industry and the latest in a growing list of deals Peak has signed with high quality customers, including seven North American publicly listed companies. AGH is very optimistic about the cannabis-infused beverage category and Peak remains well positioned to capitalise on the recreational cannabis boom in general.

BBCCC's head of cannabis, Paul Weaver, added:

Peak has built a world class facility in Canada, with the right staff and systems in place to ensure every drink is prepared with the highest care and excellence. WeedMD is one of Canada's oldest and most respected regulated cannabis cultivators. Their unwavering commitment to quality is exactly what we look for in our partners.

Finally, Entourage's CEO and chair, George Scorsis, stated:

[O]ur collective industry expertise together with Entourage's cannabis research and advanced branding strategies will establish our product portfolio with another unique offering. In addition, this provides an opportunity to further explore our collective reach into international markets.

Althea share price snapshot

Despite being in the green today, the Althea share price has been struggling recently.

It has fallen 42% year to date. It is also currently 32% lower than it was this time last year.  

The post Althea (ASX:AGH) share price jumps 9% on cannabis drinks news appeared first on The Motley Fool Australia.

At the time of writing, Althea shares are down a sizeable 10.53% to 25.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.34% to 7,799 points.

What did Althea announce?

A reason for the steep fall in the Althea share price could be an impending share dilution by the company.

According to today's announcement, Althea advised it has successfully completed an institutional placement, raising $10.64 million before costs.

Both new and existing institutional and sophisticated investors signalled strong interest to support Althea's growth plans.

As a result, around 44.35 million shares will be issued to participating investors at a price of 24 cents each. This represents a 15.8% discount on the last closing price of Althea shares before going into a trading halt on 23 August.

Althea will use the proceeds of the placement to fund a range of growth initiatives across the company's pharmaceutical business. This includes supporting further expansion in Australia, Europe, and other international markets. Furthermore, Althea will use part of the funds for general working capital expenses.

Althea group CEO Joshua Fegan commented:

We are very pleased to have received strong interest for this capital raising. The additional funding will fuel a range of strategic growth initiatives in our pharmaceutical business, and I'd like to take this opportunity to thank our new and existing shareholders for their support. We look forward to updating the market with news regarding our progress in established territories, as well as our ongoing international expansion.

About the Althea share price

Attributing to today's loss, the Althea share price has given up 40% of its value since the beginning of 2021. Looking at a larger time frame, the company's shares haven't fared much better, down 30% over the past 12 months.

On valuation grounds, Althea has a market capitalisation of around $66.9 million, with approximately 262 million shares on issue.

The post Why the Althea (ASX:AGH) share price is sinking 10% today appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are pushing higher:

Althea Group Holdings Ltd (ASX: AGH)

The Althea share price is up 3% to 36 cents. Investors have been buying the cannabis company's shares after it signed a manufacturing agreement with Delshen Therapeutics Corp. It is a wholly owned subsidiary of 48North Cannabis Corp, which is a Canadian cannabis licensed operator and brand marketer. According to the release, Althea's Peak Processing Solutions business will manufacture four products for 48North's Latitude brand with minimum order quantities of C$1.25 million.

Audinate Group Ltd (ASX: AD8)

The Audinate share price has jumped 6.5% to $9.19. This follows the release of a full year update by the audio over IP networking solution provider. That update reveals that Audinate achieved revenue of US$25 million in FY 2021. This was an increase of 23% from the US$20.4 million it achieved a year earlier. Audinate's solid growth was driven partly by an extremely strong fourth quarter performance. During the three months ended 30 June, the company's revenue increased 74% over the prior corresponding period.

Perenti Global Ltd (ASX: PRN)

The Perenti share price is up almost 3% to 75.5 cents. The catalyst for this was an announcement that the engineering company's Barminco business has finalised a contract with Panoramic Resources Limited (ASX: PAN). The contract is for development and production works at the Savannah Nickel Project in the Kimberley region of Western Australia. The finalised contract represents a value of approximately $280 million over a four-year term.

Viva Energy Group Ltd (ASX: VEA)

The Viva Energy share price is up over 4% to $2.05. Investors have been buying the energy company's shares following the release of a first half update. According to the release, Viva Energy had a very strong first half thanks to sales growth from its non-aviation businesses. It expects first half operating earnings of $390 million to $410 million. This will be an increase of 34% over the pre-pandemic levels of FY 2019.

The post Why Althea, Audinate, Perenti, & Viva Energy shares are pushing higher appeared first on The Motley Fool Australia.

In morning trade, the cannabis company's shares are up 4% to 36.5 cents.

Why is the Althea share price climbing?

Investors have been bidding the Althea share price higher today following the release of a contract update.

According to the release, the company's Canadian subsidiary, Peak Processing Solutions, has signed a manufacturing agreement with Delshen Therapeutics Corp. It is a wholly owned subsidiary of 48North Cannabis Corp, which is a Canadian cannabis licensed operator and brand marketer.

The release explains that under the agreement, Peak Processing Solutions will manufacture four products for 48North's Latitude brand. The four products are a CBD body lotion, a 1:1 THC/CBD body lotion, CBD bath salts, and a 1:1 THC/CBD bath salts.

Management notes that the 1:1 bath salt product is already on the market, performing strongly and the only item of its kind currently available.

What is the contract worth to Althea?

The two-year, non-exclusive, agreement includes minimum order quantities with a combined value of approximately C$1.25 million.

These minimum order quantities, which operate on a per product basis, are required to be purchased over a period of 12 months from the date the first purchase order for each product is accepted by Peak Processing Solutions.

Althea's CEO, Joshua Fegan, said: "This agreement with 48North is once again recognition that Peak is becoming a major player in the Canadian legal cannabis market. The opportunity to supply the well-known Latitude brand will enable the team at Peak to demonstrate their ability to produce fantastic topical and bath products, which consumers will love."

"In addition to this latest 48North agreement, Peak continues to make great progress with more and more of our client's products getting picked-up by the provincial distributors and hitting dispensary shelves. After receiving our Health Canada license in September 2020, Peak is expected to become EBITDA positive by the end of 2021," he added.

The post Why the Althea (ASX:AGH) share price is charging higher today appeared first on The Motley Fool Australia.

But some sectors inevitably performed better than others. That's capitalism for you. And the sector we're looking at today – ASX cannabis shares – certainly had its fair share of both winners and losers.

So let's check out how this popular sector fared in the financial year that has just passed us by.

How did the top ASX cannabis shares fare in FY21?

Below is a table of how the ASX's top cannabis shares performed in FY2021:

As you can see, it was something of a mixed bag. If you were lucky enough to hold Creso Pharma shares over the financial year, you would have enjoyed a very pleasing gain of more than 350%. However, if you were unfortunate enough to have money invested in Ecofibre, you instead would have had to cop a nasty near-70% loss for your time, effort and capital.

Highs or red eyes for ASX cannabis?

While each company had its own individual trials, triumphs and tribulations, it's worth noting this is a sector that often moves in tandem. This is due to the unique but uniform challenges ASX cannabis shares all face. The most prominent of these is, of course, the legal status of cannabis itself.

Whilst recreational use of cannabis/marijuana is still illegal in many countries, including Australia, recent changes have been happening.

Perhaps at the forefront of these changes is the ever-evolving regulatory landscape in the United States. As it currently stands, 18 US states currently allow recreational use of cannabis.

Most recently, we saw the state of New York 'legalise it' back in April. This saw an immediate boost to the values of ASX cannabis shares despite the Australian market implications being limited.There is also debate in Mexico over the potential legalisation of cannabis. If this went ahead, it could open up a market of nearly 130 million people.

Another headache…

On the other hand, ASX cannabis shares have seen some setbacks in this arena as well. Last October, New Zealand held a 'reefer-rendum' on legalising recreational use of cannabis across the ditch. It failed, meaning that, at least for now, recreational use of cannabis remains illegal in the Land of the Long White Cloud. This was a big setback for the ASX cannabis sector here in Australia.

But, as you may have noted, there were some clear winners in this space regardless. As we noted earlier, Creso Pharma was the top performer in its sector.

Creso managed to capture investor attention through its acquisition of Halucenex Life Sciences. Halucenex specialises in psychedelic compounds and stands to benefit if the US state of California legalises psilocybin (the active drug in 'magic mushrooms'). This is still currently being debated in the Californian Congress but investors certainly seem optimistic.

It's also worth noting that some of the worst-performing ASX cannabis shares of FY21 were once known as some of the best performers.

Companies like Althea and Xalra were top-performing companies as recently as last year. But the tide has definitely turned for some of these companies' share prices. Mostly, complications surrounding the pandemic, as well as regulatory issues, are mostly to blame here for the woes of Ecofibre and Cann Group in particular.

The post Blazing it? How the top ASX cannabis shares performed in FY21 appeared first on The Motley Fool Australia.

In early trade, the cannabis company's shares are up 4.5% to 33.5 cents.

Why is the Althea share price on a high today?

Investors have been buying Althea's shares this morning after it announced its expansion into a new market.

According to the release, the company has completed its first shipment of Althea medicinal cannabis products to its local partner in South Africa. Althea's exclusive distributor in the country, Africann, is a licensed cannabis wholesaler specialising in the import and distribution of medicinal cannabis products.

Management believes this first shipment of Althea products is a major achievement for the company and expects it to provide Althea with an early mover advantage in the emerging South African medicinal cannabis industry. This market is estimated to be worth approximately US$667 million by 2023.

Althea's CEO, Joshua Fegan, believes that this latest development supports its ambition to become the world's leading supplier of cannabis-based medicines.

He said: "We are excited to have exported our initial shipment of Althea products for South Africa. This development once again reflects our ambition and progress in becoming the world's leading supplier of cannabis-based medicines."

"The Althea brand continues to build trust and enduring loyalty with Healthcare Professionals and patients all over the globe, with South Africa the latest country able to experience our unrivalled market access program," Mr Fegan concluded.

Investors will no doubt be hoping that today's development is the catalyst to getting the Althea share price heading in the right direction again.

After all, even after today's gain, the Althea share price is down by 24% since the start of the year. This is similar to the declines being recorded by fellow cannabis shares such as Cann Group Ltd (ASX: CAN) and Creso Pharma Ltd (ASX: CPH) in 2021.

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Take Creso Pharma Ltd (ASX: CPH). It's up 1% to 20 cents a share. Or Cann Group Ltd (ASX: CAN), up 0.54% to 54 cents a share. Elixinol Global Ltd (ASX: EXL)? It's up 5.56% to 19 cents a share. Althea Group Holdings Ltd (ASX: AGH) is up 1% at 50 cents.

What gives?

Well, there's a piece of news out today that might be getting investors keen to light up on cannabis shares.

According to the Governor of the US state of New York's office, Governor Andrew Cuomo has just signed a bill into law that has legalised recreational use of cannabis in the state of New York.

As we flagged a few days ago, New York now joins 14 other US states that have already legalised recreational use. The new New York law will allow the state to issue licenses for dispensary businesses to sell marijuana to adults aged 21 and over legally.

Further, outside-of-home possession of marijuana is now legal to a limit of 3 ounces. It will also allow adults aged over 21 to grow 3 mature and 3 immature plants each (with a limit of 6 mature and 6 immature plants per household).

The governor expects that the new law will raise approximately US$350 million in new taxes annually, as well as create between 30,000 and 60,000 new jobs across the state.

How will this affect ASX cannabis shares?

Well, this is something of a hollow victory for the ASX cannabis sector. What happens in the United States, of course, has no direct implications for Australia's cannabis industry. Recreational cannabis remains illegal in every Australian state and territory, although laws differ when it comes to decriminalisation. Medicinal use is more prevalent, but again, it's still early stages.

Even so, proponents of wider cannabis legality would no doubt still be heartened. Over in the US, we have seen a 'domino effect' with legalised cannabis. 15 states now allow recreational marijuana, but it was only back in 2012 that the first two US states (Colorado and Washington) legalised recreational use. A further 36 US states allow medicinal use as of today.

Arguably the more states and countries follow in New York's path, the better the prospects here for ASX cannabis shares.

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Aside from a few smoky hash bars in the Netherlands, cannabis use was prosecuted vigorously across most countries. While billions of dollars were earned in global black markets, ASX investors had no means to tap into the underground industry.

But the 21st century has brought a lot of change, albeit slowly.

Today a growing cadre of nations have legalised medicinal cannabis use, including Australia. While recreational use remains illegal in Australia, the list of nations (and states within the United States) giving the green light for recreational pot smoking also grows inexorably.

New York's legal cannabis bill eyes $460 million tax revenue

In the US, New York looks to become the latest state seeking to capitalise on the tax benefits of legalised cannabis use while lightening the burden on its legal system.

The state's Legislature is scheduled to vote on legalising the sale and use of cannabis this week.

As Bloomberg reports:

The expansive bill would allow dispensaries to open as soon as next year, and includes special cannabis taxes, permission for home growers to cultivate their own marijuana, and as well as limits on the number of licenses that can go to large corporations.

According to New York's governor Andrew Cuomo, legalising the sale of marijuana could bring in US$350 million (AU$460 million) in taxes every year. He also said it might create 30,000–60,000 new jobs.

The proposed legislation will also see people previously convicted for cannabis crimes that will no longer be illegal have their convictions expunged.

Two leading ASX cannabis shares

New York's move on legal cannabis alone is unlikely to have an immediate, large impact on most ASX cannabis shares.

But for longer-term investors, the state's move highlights the continuing trend towards global legalisation. And with that trend, the best-placed ASX cannabis shares could see their share prices run far higher.

There are a growing number of cannabis shares on the ASX. For the purposes of this article, we'll look at 2.

First up, Creso Pharma Ltd (ASX: CPH). The company develops pharmaceutical-grade cannabis treatments for human and animal healthcare.

Creso Pharma has a market cap of $220 million. The Creso share price is down 10% since Friday after the company announced the intent for an $18 million capital raising at 19 cents per share. Despite that fall, Creso shares are still trading at 22 cents per share at the time of writing.

Over the past 12 months, the Creso Pharma share price has soared 275%. That dwarfs the 36% gain posted by the All Ordinaries Index (ASX: XAO). So far in 2021, Creso shares are up 25%.

The second ASX cannabis share we'll look at today is Althea Group Holdings Ltd (ASX: AGH). With a market cap of $139 million, the company produces and supplies pharmaceutical-grade medicinal cannabis in Australia and the United Kingdom.

Down 0.96% today, despite announcing additions to its medicinal cannabis product line, the Althea share price has also outperformed over the past 12 months, up 115%.

Year-to-date, Althea shares have gained 17%, compared to a 1% gain on the All Ords.

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At the time of writing, the cannabis company's shares are up 2% to 53 cents.

What did Althea announce?

This morning Althea announced further additions to its range of medicinal cannabis products.

According to the release, Althea has officially launched a new and innovative range of 20ml full-spectrum cannabis oil products. These products carry the same trade names, and utilise the same formulations, as existing in-market Althea 50ml and 100ml sized products.

The release explains that the 20ml sized product is designed to promote flexibility in a patient's treatment. This is especially in the case of initiating patients and those suffering from intermittent illnesses.

Management notes that the smaller unit size provides new medicinal cannabis patients with an option to trial the medication over the recommended two or three-week titration period. After which, in conjunction with their Healthcare Professional, they can determine if the treatment was beneficial for them.

The company believes that when the patient experiences a positive outcome from their medication, they will transition to the more economical larger sized bottle.

Why did it make the move?

Althea believes that costs have prohibited many patients from trialling medicinal cannabis as a treatment option.

It notes that a recent Australian Government inquiry received evidence that cost was "…one of the biggest barriers for patients struggling to access medicinal cannabis."

By expanding its product portfolio, the company aims to provide price-sensitive patients with a lower entry point, potentially boosting patient acquisition.

Althea's CEO, Joshua Fegan, commented: "At Althea, we understand that price remains a challenge for many potential new patients that want to trial medicinal cannabis for their conditions. We believe the launch of the new Althea 'flexi' 20ml cannabis oil range will be a great way to provide more access to patients via trial size products. This will in turn build confidence in our medicines and brand as we continue to be the first choice for a growing number of Australia's medicinal cannabis patients."

Following today's gain, the Althea share price is now up 20% in 2021.

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What's going on with Mexico and cannabis?

It wasn't long ago that Mexican authorities still diligently pursued and prosecuted people for breaking the nation's cannabis laws. Even minor possession could incur a heavy fine or jail term.

That changed in 2009, when the nation decriminalised the possession of small amounts of cannabis. Nine years later, in 2017, Mexico gave the green light to select medicinal marijuana products. The medicinal market is likely to expand this year.

But even more importantly for ASX cannabis shares, the country could soon join the growing cadre of nations to fully legalise its recreational use.

According to Bloomberg:

With a population approaching 130 million, Mexico is on the cusp of becoming the largest legal recreational market in the world. That could pressure the US to follow suit, since it will be sandwiched between Mexico and Canada, countries that both allow cannabis use.

Emily Paxhia, managing partner of Poseidon Asset Management, points out why Mexico's move to legalise recreational use could be especially impactful to the global cannabis industry (quote summarised by Bloomberg):

Mexico's move is particularly significant for global cannabis. Because many multinational pharmaceutical, alcohol and consumer products companies are already there, it could make the country an attractive place to export cannabis and related products from.

And it's not just Mexico looking to legalise recreational use. Although the measure recently failed in New Zealand by a narrow margin, Curaleaf Holdings Inc (CNSX: CURA) executive chairman Boris Jordan says, "Countries like Poland, Ukraine, South Africa – there are even rumours of Egypt – are also moving toward legalisation."

And as the world marches towards legal cannabis use, well-placed ASX cannabis should benefit.

Two leading ASX cannabis shares

There are a number of ASX cannabis shares that stand to benefit as Mexico and the rest of the world move to legalise both the medicinal and recreational use of marijuana.

We'll just have a quick look at 2.

Creso Pharma Ltd (ASX: CPH) develops and commercialises pharmaceutical-grade cannabis and hemp-based nutraceutical products and treatments for humans and animals.

Flat in intraday trading today, the Creso share price is up 17% year-to-date and up an impressive 250% over the past 12 months. By comparison, the All Ordinaries Index (ASX: XAO) is up 39% over the past full year. Creso has a market cap of $200 million.

Althea Group Holdings Ltd (ASX: AGH) grows, supplies, imports, and exports pharmaceutical-grade medicinal cannabis in Australia and the United Kingdom.

The Althea share price is also flat in afternoon trading. So far in 2021 shares have gained 17%, while over the past 12 months the Althea share price has soared 222%. Althea has a market cap of $135 million.

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At the time of writing, the cannabis company's shares are up 3% to 53 cents.

Why is the Althea share price pushing higher?

Investors have been buying Althea shares this morning after it released a presentation.

This presentation included details on its European expansion, its growth opportunities, and, unconventionally, a broker recommendation.

In respect to its European expansion, Althea estimates that it has a 1 billion pound opportunity in the UK market. This is a big positive given that it believes it currently has a 33% market share in the UK.

In addition, it estimates that the Germany market will be worth 7.7 billion euros by 2028. Positively, last month it made its first shipment into the potentially lucrative market.

Althea has also been selected to supply the French National Agency for Medicines and Health Products Safety with second-source medicinal cannabis products for its national pilot program. This program is aiming to assess the relevance and feasibility of legalising medicinal cannabis in France.

If all goes to plan, the company believes the France market could be worth 9.5 billion euros by 2028.

The rest of the world

On home soil, management estimates that it has a 25% share of the Australian market. It is forecasting the Oceania market to grow to be worth US$1.55 billion by 2024.

In Africa, the company is expecting to make its first shipment into the South African market later this year. This market is predicted to be worth US$667 million by 2023.

Finally, in North America the company's Peak Processing Solutions business is estimated to have a US$2.7 billion market opportunity.

Clearly, the company has a lucrative global market opportunity to grow into. However, given the size of the market and the relatively low barriers of entry, competition is likely to grow strongly in the future.

Nevertheless, that hasn't stopped analysts at PAC Partners from putting a spec buy and $1.48 price target on the company's shares.

According to the presentation, the broker is predicting revenues of $20.5 million in FY 2021 and then $45.1 million in FY 2022.

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At the time of writing, the cannabis company's shares are up 2% to 52 cents.

Why is the Althea share price pushing higher today?

Investors have been buying Althea shares this morning following the release of a positive announcement.

That announcement reveals that its Canadian subsidiary, Peak Processing Solutions, has received an initial purchase order from Peace Naturals Project.

Peace Naturals Project is a subsidiary of C$4.4 billion and Nasdaq listed cannabis giant Cronos Group.

According to the release, the initial purchase order forms part of a larger one-year commercial services agreement and is valued at approximately C$134,000.

Under the agreement, Peak Processing will perform the hydrocarbon extraction of cannabis biomass and process the extract into cannabis concentrate products, ready for sale into the Canadian adult-use cannabis market.

Management notes that the capability to produce hydrocarbon extracted cannabis concentrates is in limited supply in Canada. Positively for Althea, Peak Processing is among a handful of processors able to service this in-demand product category. Production is expected to commence this month.

Management commentary

Althea's CEO, Joshua Fegan, was pleased with the agreement and notes that its Peak Processing business has started 2021 strongly.

He said: "It is pleasing to see how quickly the Peak business is taking off this year, attracting a world-class supply agreement with Peace Naturals, just a few months post licensing. We look forward to continuing to secure supply agreements with other like-minded players in the fast-growing Cannabis 2.0 space and further demonstrating the world-class cannabis extraction capabilities of Peak."

Today's gain means that the Althea share price has now risen an impressive 73% since this time last year.

This compares very favourably to a 5% gain by the benchmark ASX 200 index.

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At the time of writing, the Althea share price has retreated slightly and is sitting at 56 cents.

Let's take a closer look and see Althea managed during the first-half of the 2021 financial year.

How did Althea perform in the first-half?

The Althea share price is on the move after investors appear to be pleased with the company's latest result.

According to its release, Althea delivered a robust performance underpinned by business growth across Europe and North America.

For the six months ending 31 December 2020, Althea reported total revenue of $5,098,000. This represented an increase of 175.3% on the prior corresponding period (pcp). The strong sales came from the company's growing market share of the Australia and United Kingdom medicinal cannabis sector.

Althea revealed a loss from ordinary activities after providing income tax of $8,274,000. This reflected a fall of 0.9% over the comparable period. While the bulk of the expenses was attributed to employee costs ($5,250,000), the company also made a foreign exchange loss of $1,529,000.

At the end of the calendar year, Althea had a cash balance of $8,644,000. A significant drop from the $22,361,000 recorded in the prior year.

Althea segment overview

Australia

Althea stated that in its biggest market, it is continuing to see sales growth of its medicinal cannabis products. This is due to the company developing the Healthcare Professional (HCP) prescribing community through its infield sales team and Althea Concierge platform.

As a result of the strategy, HCP and patient numbers soared in the first half. Althea recorded 12,273 patients at the end of 2020, tripling the figure from the year before. In addition, 834 HCP prescribed the company's products to patients, doubling the amount achieved in the prior corresponding period (pcp).

United Kingdom

Identified as an emerging market, Althea revealed that sales jumped to $209,706, a 90% jump from November to December 2020. The positive momentum was driven by the company's infield sales team efforts to educate and onboard additional prescribing specialists.

Canada

Across the Atlantic, Althea's wholly-owned subsidiary, Peak Processing Solutions has been making tailwinds within the Canadian market. Following the Standard Processing Licence received in September 2020, the company signed contracts worth CAD$4.65 million to supply cannabis products. Executed in November last year, the deals will run for a period of 12 months.

A further agreement was also entered in December with The Tinley Beverage Company for manufacturing and distributing three cannabis-infused beverages. This will be targeted toward the adult-use cannabis market in Canada.

Germany

Althea has commenced operations following the approval of the necessary sale and distribution licences from Germany's health regulator (BfArM). So far, the company has shipped an initial order of 2,000 units valued at around $1 million to a local partner, Nimbus Health GmbH.

Althea will adopt the same strategy used in other markets, incorporating its infield sales team with Althea Concierge. The final stages of planning is currently underway.

Words from the Althea CEO

Althea CEO Joshua Fegan touched on the company's first-half result, saying:

I am very proud of our Australian and UK teams for producing record revenue in the second half of 2020. Generating market leading sales at the same time as scaling the business for growth throughout Europe and North America, requires a solid team of qualified and dedicated people. The Company has recruited well across all strategic business units and remains on track to deliver on its corporate objectives.

The Althea share price has accelerated to more than 80% over the last 12 months.

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