The party started when Canada and the United States moved to legalise not just medicinal cannabis but also recreational use among adults. That was a national decision in Canada, while in the US, it remains a state-by-state call.

Australia's federal government, rarely one to grab the reins, eventually followed suit and legalised medical cannabis use in 2016. In 2018, certified companies were given the green light to export marijuana products from Australia.

This saw many ASX cannabis stocks rocket higher in 2021 and into 2022.

And then many shareholders got burnt.

Here's how these three former smoking hot stocks have performed over the past five years:

• Little Green Pharma Ltd (ASX: LGP) shares are down 74%
• Cann Group Ltd (ASX: CAN) shares are down 88%
• Ecofibre Ltd (ASX: EOF) shares are down 99%

As for the past 12 months, only Little Green Pharma has managed to stem the bleeding, with shares trading at 12 cents apiece today, right where they were 12 months ago.

Ecofibre shares, on the other hand, have plunged 62% over the 12 months, while Cann Group shares are down 52% since this time last year.

But with medicinal cannabis sales in Australia reported to be "booming", could these beaten-down ASX cannabis stocks reignite?

ASX cannabis stocks in fast-growing market

Citing the Penington Institute's latest annual Cannabis in Australia Report, The Guardian notes medicinal marijuana sales Down Under look to have quadrupled over the last two years.

And the uptake in medical cannabis still appears to be gaining momentum.

According to the report, 2.87 million units were sold in the first half of 2024, up 71% from the 1.68 million units sold in the second half of 2023.

The report said Aussies spent around $234 million on medicinal cannabis in 2022, $448 million in 2023, and $402 million in the first half of 2024.

With this growth in mind, ASX cannabis stocks could be eyeing a $1 billion annual market by the end of 2024.

"We're expecting that by the end of this year it will have reached a billion [dollars], which is more than quadrupling the 2022 numbers," Penington Institute CEO John Ryan said.

Recreational legalisation not on the short-term cards

In both the US and Canada, recreational use of marijuana was legalised years after it was given the green light for medicinal use.

Wayne Hall, from the National Centre for Research on Youth Substance Use Research at the University of Queensland, noted (quoted by The Guardian), "When you create a medical cannabis program … the pressure is often brought to bear to expand it, so it merges into a de facto legal cannabis market for adults."

Legalised recreational use in Australia would likely send ASX cannabis stocks marching higher.

To date, only the Australian Capital Territory has made this move. The ACT doesn't allow commercial sales, instead mandating that people grow their own.

Investors in ASX cannabis stocks hoping to see the Australian government legalise recreational use were handed a setback yesterday when the bill was voted down.

The post ASX cannabis stocks eyeing $1 billion domestic market appeared first on The Motley Fool Australia.

Since then, the effects have worn off and this side of the market has been getting very little attention.

That was until today when two ASX cannabis shares made big moves in opposite directions. Let's see what is causing the buying and selling.

Cann Group Ltd (ASX: CAN)

The Cann Group share price is up 7% to 4.8 cents on Wednesday after being given a boost from banking giant National Australia Bank Ltd (ASX: NAB).

According to the release, NAB has agreed to defer the quarterly interest payment and facility fee for its construction loan to a future date to be mutually agreed. The interest payment and facility fee total approximately $0.9 million and was due on 22 November.

In addition, the ASX cannabis share revealed that the bank is considering the deferment of the subsequent two quarterly interest and facility fee payments. Furthermore, NAB has confirmed its intention is not to call upon any of the outstanding loan balances during the period through to 29 September 2025.

Management notes that the deferment of up to three quarters of interest payments allows the company to accelerate its trajectory towards critical milestones of positive EBITDA, then positive cash flow.

Cann Group's CEO, Jenni Pilcher, commented:

NAB's ongoing support has been instrumental in positioning Cann for long-term success. This partnership underscores the shared commitment to the company's growth and operational excellence.

Little Green Pharma Ltd (ASX: LGP)

The Little Green Pharma share price is down over 7% to 12.5 cents.

This follows the release of the vertically integrated medicinal cannabis and psychedelics company's half year report.

For the six months, the ASX cannabis share reported a solid 36.8% increase in revenue to $17.5 million. This was driven by sales growth in both domestic and international markets and across most product categories.

However, this top line growth didn't flow through to its bottom line. Instead, its losses widened by 58.7% to approximately $3.5 million.

Though, it is worth noting that its adjusted EBITDA for the half-year was $266,000, which is up from a negative $511,000 in the prior comparative period. This was driven primarily by sales growth and early signs of economies of scale.

Following today's decline, Little Green Pharma's shares are now down over 20% since the start of the year.

The post 2 ASX cannabis shares with big news today appeared first on The Motley Fool Australia.

That's a far cry from the heady days of 2019 and 2020 when ASX cannabis shares joined their American-listed peers in setting investors' portfolios ablaze.

That boom came amid the early excitement over marijuana legalisation in Canada along with multiple US states.

But like their global peers, Aussie-listed pot stocks have mostly trended lower since then.

And the past year, which saw the All Ordinaries Index (ASX: XAO) gain 4.1%, is no exception.

Here's how these four leading ASX cannabis shares have performed over the 12 months:

• Botanix Pharmaceuticals Ltd (ASX: BOT) shares have soared 144.4%
• Little Green Pharma Ltd (ASX: LGP) shares are down 18.8%
• Ecofibre Ltd (ASX: EOF) shares are down 65.6%
• Cann Group Ltd (ASX: CAN) shares are down 61.3%*

(*Cann Group shares remain suspended as of 1 March.)

With the exception of Botanix, that's some pretty poor returns from the sector.

But ASX cannabis shares could be set for some fresh tailwinds thanks to none other than the US Drug Enforcement Administration (DEA).

Here's what could set ASX cannabis shares alight

For 50 years now marijuana has been classified as a Schedule I substance in the US. That's the same rating given to drugs like heroin, cocaine and LSD, substances considered to have no acceptable medicinal uses and that are prone to abuse.

But the DEA has been reviewing that classification in recent months. And yesterday (overnight Aussie time), news broke that the agency was moving to reclassify cannabis to a lesser category.

That caused some major excitement in American markets.

Shares in Canadian-listed Canopy Growth Corp (TSE: WEED), for example, rocketed 80%.

So far the reaction among ASX cannabis shares is mixed. While Little Green Pharma and Botanix shares are just about flat today, Ecofibre shares are up 13.3% at the time of writing.

How would the DEA's reclassification change market dynamics?

Moving cannabis to a less onerous drug classification would lower taxes on pot stocks and could also encourage more US states to legalise it, offering a growing legal market.

It would also help cannabis companies in the US to access banking services.

Dan Ahrens, managing director of Advisorshares Investments said (quoted by Bloomberg), "There's been a lot of rumours coming out in the last few days, but this looks official… I think it makes it easier for the House and Senate to act on SAFER Banking."

And, as Jefferies analyst Owen Bennett notes, a reclassification by the DEA could see more institutional investment flow into the sector.

While that would likely be more beneficial to American listed stocks, ASX cannabis shares could enjoy some welcome tailwinds from this shift.

"The major reason current multiples are depressed is lack of institutional ownership," Bennett said.

He added that the DEA's move:

Would hugely improve the prospects of full federal legalisation within the next five years, with a critical piece of this move making it easier to study cannabis and thereby fill in the data gaps where there may be concerns around its widespread use among the population.

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

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.

That's despite the fact that the cannabis stocks operate in a country where medicinal marijuana is technically legal. That's enabled them to provide valuable health services to many thousands of Australians.

In Victoria alone, around 65,000 people were reported to have medicinal cannabis prescriptions in March this year.

But that hasn't helped lift the fortunes of ASX cannabis shares like Incannex Healthcare Ltd (ASX: IHL), Little Green Pharma Ltd (ASX: LGP), and Cann Group Ltd (ASX: CAN).

Here's how these three ASX cannabis shares have performed over the past 12 months:

• Little Green Pharma shares are down 37%
• Cann Group shares are down 48%
• Incannex Healthcare shares are down 53%

Now these are obviously not the kind of returns any investor wants to see.

But the longer-term outlook for ASX cannabis shares may have just gotten a bit brighter.

Could this help boost ASX cannabis shares?

Medicinal marijuana was legalised in Australia in 2016.

But, with the exception of the ACT, recreational use remains verboten. That's seen police pursue more than 700,000 pot-related offences since 2010 across the nation.

Now, in a move that could boost ASX cannabis shares longer-term, the Legalise Cannabis party has introduced bills to legalise marijuana for personal use as well as medical reasons.

The bills were tabled yesterday to three state parliaments: Western Australia, Victoria, and New South Wales. The Legalise Cannabis party noted this is the first time the same bill has been simultaneously introduced in three states.

It will, however, be some time before ASX cannabis shares might directly benefit from the proposed bills, all called the Regulation of Personal Adult Use of Cannabis Bill 2023.

While the move has broad support from the Liberal Democrats and Greens, it will need some support from the major parties to pass.

Victorian premier Daniel Andrews has already flagged his opposition. "My position is the law as it stands now," he said.

But then laws can and do change all of the time.

What changes are being proposed?

In a nutshell, the new bill would allow adults (18+) to possess modest quantities of marijuana and grow up to six plants at their homes. This is largely in line with the new laws that came into effect in the ACT in 2020.

In itself, this is unlikely to have any short-term material impact on ASX cannabis shares, as it won't directly open up any larger market opportunities.

Commenting on the proposed bill, New South Wales upper house MP Jeremy Buckingham said (quoted by ABC News), "This is a historic move by the Legalise Cannabis Party across Australia to bring a coordinated reform for cannabis legalisation."

Victorian MP David Ettershank added:

The majority of Victorians support the regulation of cannabis, and a huge number of Victorians … regularly consume cannabis. There's a lot of politicians, again from both sides of the house, who use cannabis…

Cannabis needs to be taken out of the world of crime and regulated intelligently.

Now, here's where ASX cannabis shares could potentially receive some major tailwinds over the longer term.

According to police estimates, Australians spend some $8 billion a year on marijuana. And all of that goes straight into the black market.

The next planned step of the legalisation process was highlighted by Legalise Cannabis Party upper house member Brian Walker, a former GP.

Walker said his party is aiming for a regulated, legal cannabis market.

"We want to move further and actually take it to the stage of actually being taxable so we can get some revenue as a government for that," he said.

Not only would the government be dipping in for its tax take if this succeeds, but ASX cannabis shares would find a much larger market for their products.

The post Why ASX cannabis shares just jumped back into the spotlight appeared first on The Motley Fool Australia.

All told, the cannabis shares have grown, cured, and prepared medicinal marijuana products for more than 250,000 Australians. That's how many patients have received prescriptions over the past five years, according to data from the Lambert Initiative for Cannabinoid Therapeutics.

In Victoria alone, some 65,000 people currently have medicinal cannabis prescriptions.

And it's ASX cannabis stocks like Incannex Healthcare Ltd (ASX: IHL), Creso Pharma Ltd (ASX: CPH), and Cann Group Ltd (ASX: CAN) that make it all possible.

But using medicinal cannabis comes with an unexpected legal risk. One that Victoria's lawmakers are working on rectifying.

Victoria's road rules up for an overhaul

In what's likely to be welcome news to shareholders in ASX cannabis stocks, and more welcome still to patients taking medicinal marijuana, Victoria is looking to amend its drug-driving laws to reflect the legality of medicinal cannabis.

As The Guardian reports, the Road Safety Amendment Bill was introduced by newly elected Legalise Cannabis MPs. The bill was said to have support from both major parties. Yesterday, Victoria's government announced it would take up the issue within the next few months.

As it stands, it's a crime for a driver to have any trace of THC (the active component in marijuana) in their system. The problem here stems from the fact that THC can often be detected for many weeks after use. This means drivers with a legal prescription can find themselves guilty of drugged driving even if they're in no way impaired.

Under the Road Safety Amendment, the law would treat medicinal cannabis like other prescription medicines.

Labor MP Harriet Shing is a member of the medicinal cannabis and safe driving working group. She said it was a "significant priority" for the law to distinguish between the presence of THC in a person's system "and impairment".

According to Shing (quoted by The Guardian):

This work has been going on for a number of years now. The working group has actually discussed at length the complexities of this matter and the options and opportunities that might be available.

We need … to find a way through all of this so that all drivers are able to be safe on our roads and so that we can provide those medical supports that Victorians need and indeed deserve.

Legalise Cannabis MP Rachel Payne said, "We are hopeful a solution can be found fast, considering the negative impact the law currently has on Victorian patients every day."

How have these ASX cannabis stocks been tracking?

The ASX cannabis stocks we listed above have all seen big falls in their share prices over the last year.

Over the past 12 months:

• Creso Pharma shares are down 76%
• Cann Group shares are down 31%
• Incannex Healthcare shares are down 70%

The post Buying ASX cannabis stocks? Here's what the Victorian government is considering right now appeared first on The Motley Fool Australia.

That's partly because similar headwinds facing cannabis stocks worldwide have hit the sector.

Firstly, there's rocketing interest rates. Higher rates have hit growth shares particularly hard as investor risk appetite has waned. Secondly, there's the slowing pace of legalised markets across the world.

Legislation in the United States, the world's largest economy, is being closely watched. But the future of the legal marijuana market in the highly influential nation remains uncertain.

ASX cannabis shares under pressure

So how have these headwinds impacted ASX cannabis shares?

Well, so far in 2022:

• Incannex Healthcare Ltd (ASX: IHL) shares are down 64%
• Creso Pharma Ltd (ASX: CPH) shares are down 65%
• Bod Australia Ltd (ASX: BOD) shares are down 60%

With the US markets having a big impact here in Australia, investors would do well to keep an eye on the midterm election results. The election is being held tomorrow, 8 November, with results expected over the coming days.

Why the US midterm elections matter to investors Down Under

If you're looking at buying ASX cannabis shares, here's what's a stake in the midterm elections.

First, US President Joe Biden has expressed a desire to legalise marijuana on a Federal level. Currently, it remains illegal federally, despite a growing number of states having given recreational and medicinal use the green light.

As you may recall, on 7 October, Biden said he was pardoning everyone convicted of simple marijuana possession under federal law.

US cannabis shares broadly rallied, as did several on the ASX.

Incannex Healthcare shares leapt 11% over two days from the closing bell on 11 October through the end of trade on 13 October.

Bod Australia also shot 11% higher on 11 October.

Creso Pharma went the other direction. The ASX cannabis share lost 25%. Though it should be noted that came after the company announced a shakeup to its board and a potentially unwanted name and branding change proposal.

Now, if the Republicans retake control of either the House or Senate, it's unlikely that marijuana will be legalised on a federal level anytime soon. And, according to most polls, it's likely the Democrats will lose at least one of those chambers of Congress.

But let's not forget how unreliable polls have been in recent years.

The second thing to watch that could have a knock-on effect on ASX cannabis shares is the referendums taking place on a state level.

Voters in five US states – Maryland, Arkansas, Missouri, North Dakota and South Dakota – will decide whether their state joins the legal bandwagon or maintains the status quo.

Maryland is one to pay particularly close attention to.

According to Bloomberg Intelligence analyst Kenneth Shea, "If four or five approve, it would probably be deemed a positive, but if Maryland does not approve, that would definitely be deemed a negative."

Stay tuned.

The post Looking to buy ASX cannabis shares right now? You'll want to watch this appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are dropping:

Ampol Ltd (ASX: ALD)

The Ampol share price is down 12% to $27.52. This morning this fuel retailer released its third quarter update. Although Ampol reported further strong earnings growth in FY 2022, it appears to have fallen short of expectations.

Cann Group Ltd (ASX: CAN)

The Cann share price is down 13% to 23.5 cents. This follows news that the cannabis company is seeking further funds from shareholders. The company has launched a share purchase plan to raise between $8 million and $10 million at an 18.8% discount of 22 cents per new share. Funds from the share purchase plan will contribute to the company's strategic investment in expanding GMP manufacturing capabilities at its Mildura operation.

Reliance Worldwide Corporation Ltd (ASX: RWC)

The Reliance Worldwide share price has sunk over 13% to $3.11. Investors have been selling this plumbing parts company's shares following the release of a disappointing trading update. For the first quarter, Reliance reported sales of US$303.1 million. While this was up 23% over the prior corresponding period, this was due largely to a US$53.8 million contribution from the EZ-Flo acquisition. Excluding this acquisition, its sales growth was 6%. And due to margin weakness, normalised EBITDA fell 4% to $63.2 million.

South32 Ltd (ASX: S32)

The South32 share price is down over 1.5% to $3.59. This appears to have been driven by a lukewarm response to the miner's quarterly update on Monday. For example, this morning Goldman Sachs retained its neutral rating but trimmed its price target on the company's shares to $3.60.

The post Why Ampol, Cann, Reliance Worldwide, and South32 shares are dropping appeared first on The Motley Fool Australia.

While all three are deep in the red today amid wider selling action that sees the All Ordinaries Index (ASX: XAO) down 1.4%, that extra attention could offer some tailwinds for cannabis stocks like Cann Group Ltd (ASX: CAN), Incannex Healthcare Ltd (ASX: IHL) and Creso Pharma Ltd (ASX: CPH).

Though if you're looking for information about ASX cannabis share Creso Pharma in the future, you may need to look up Melodiol Global Health Limited instead.

In a release this morning, Creso management announced their intention to seek shareholder approval for rebranding the company name at a future general meeting. Management said the new name represented "the global ambitions of the organisation".

So, why are ASX cannabis shares moving back into the spotlight?

How Biden could rekindle ASX cannabis shares

Since cannabis shares first began trading on the ASX and international exchanges, moves by US state governments and the vacillating prospects for legalisation by the federal government have alternately pushed them higher and lower.

Numerous US states have legalised medicinal and recreational marijuana in recent years. But cannabis has remained classified as a Schedule I substance under the federal Controlled Substances Act. That defines it as having a high potential for abuse, with no currently accepted medical applications.

But US president Joe Biden is following through with an election promise. Biden has said he will pardon everyone convicted of simple marijuana possession under federal law.

Here's what the president tweeted on Friday:

As I've said before, no one should be in jail just for using or possessing marijuana. Today, I'm taking steps to end our failed approach. Allow me to lay them out.

First: I'm pardoning all prior federal offenses of simple marijuana possession… Second: I'm calling on governors to pardon simple state marijuana possession offenses. Just as no one should be in a federal prison solely for possessing marijuana, no one should be in a local jail or state prison for that reason, either.

Biden also called on the US Attorney General "to initiate the process of reviewing how marijuana is scheduled under federal law". He noted it was currently classified "at the same level as heroin – and more serious than fentanyl. It makes no sense."

This US pot ETF surged on the news

While ASX cannabis shares aren't moving higher on Biden's legalisation push today, marijuana-focused exchange-traded fund (EFT) AdvisorShares Pure US Cannabis ETF (NYSEARCA: MSOS) leapt 41% higher in 30 minutes after the word hit the wires last week.

Though investors should take note that even if the US legalises marijuana on a federal level, not every cannabis share trading on the ASX will benefit. But companies with a significant footprint in US markets or the ability to expand into those markets, like Creso, could find some new opportunities ahead.

The post Why is everyone talking about ASX cannabis shares all of a sudden? appeared first on The Motley Fool Australia.

It wasn't all too long ago that most companies involved in the cultivation and sale of medicinal or recreational marijuana were booming. But as the pace of newly opening legal markets slowed, so too did investor enthusiasm for the sector.

So why are these two ASX cannabis shares booming all of a sudden?

Why are these ASX cannabis shares rocketing?

The All Ordinaries Index (ASX: XAO) is down 0.7% in late morning trade, following a retrace in US markets overnight.

But the Cann Group Ltd (ASX: CAN) share price is heading decidedly in the other direction, up 7.7%.

And fellow ASX cannabis share Little Green Pharma Ltd (ASX: LGP) is also up 7.7%.

The big gains come following some positive announcements from both companies earlier this week.

First, here's what Cann Group reported late afternoon on Tuesday.

Cann Group's license extended

Investors have been bidding up the ASX cannabis share after the company announced its GMP manufacturing licence for its Mildura facility was extended to cover additional manufacturing capabilities.

The Therapeutic Goods Administration (TGA) issued the initial license on 30 June.

Under the extension, Cann Group is now allowed to manufacture and release finished dried flower products from its Mildura facility for patient use.

Commenting on the development, Cann Group's CEO, Peter Crock, said:

This licence extension allows Cann to now manufacture patient-ready dried flower products at our Mildura facility, allowing us to quickly respond to market demands.

The Cann Group share price is up 9.6% since the announcement.

Little Green Pharma's new supply agreement

Also on Tuesday, ASX cannabis share Little Green Pharma reported on a new agreement inked by its wholly owned subsidiary, Little Green Pharma Denmark ApS.

The agreement will see Little Green Pharma supply German medicinal cannabis distributor Cannamedical Pharma GmbH with a high-THC strain product. The deal for the delivery of bulk medicinal cannabis from Denmark to Germany has a potential value of $4.5 million over two years.

This represents Little Green Pharma's fourth contract to supply medicinal cannabis to Germany.

The ASX cannabis share has gained 19.2% since the announcement.

The post Why are these 2 ASX cannabis shares booming all of a sudden? appeared first on The Motley Fool Australia.

Cannabis shares on the ASX include Cronos Australia Ltd (ASX: CAU), Incannex Healthcare Ltd (ASX: IHL), Emyria Ltd (ASX: EMD), Cann Group Ltd (ASX: CAN) and Creso Pharma Ltd (ASX: CPH).

Let's take a look at some of the cannabis shares on the market.

What's going on?

Many ASX cannabis shares have struggled year to date. Incannex shares have slumped 49% this year so far, while Creso Pharma shares have lost 52%.

Meanwhile, Cann Group shares have fallen nearly 2% and Emyria shares have lost nearly 30%.

Incannex is a cannabinoid and psychedelic compound medicine development company. Despite falling in the year to date, the company's shares have experienced a recent boost on the back of recent news. The company stated it has the "world's largest portfolio of patented medicinal cannabinoid drug formulations and psychedelic treatment protocols".

Commenting on the cannabis industry, Former Incannex chief medical officer Dr Sud Agarwal told The Australian the "industry went off with a bang" in 2016 and 2017. However, he said by 2021 and the second half of early 2022, there has been "a real compression of values". Dr Agarwal, current CEO and founder of Cannvalate Medical Cannabis, added:

That is mainly because a lot of companies haven't performed in terms of revenues but also people who had previously been investors in cannabis probably just got fatigued.

Meanwhile, Cronos develops and sells cannabinoid brands and products in Australia, Japan and Hong Kong. Cronos shares have soared 55% in the year to date.

SG Hiscock Medical Technology Fund manager Rory Hunter singled out Cronos as a company making money. Also commenting in The Australian, he said:

The fact is not all companies are underperforming. Cronos Australia is one ASX-listed company that has strong financial performance.

It's downstream in the value chain, highly scalable and has a cash generative business model. It's also the only ASX-listed company in the industry making money right now.

How have these ASX cannabis shares performed in the last month?

In the past month, ASX cannabis shares appear to be recovering. The Cronos share price has lifted nearly 57%, while Incannex shares have exploded 60% and Emyria shares have jumped nearly 23%.

However, Creso Pharma shares have descended 11% in the last month and Cann Group shares have fallen nearly 7%.

For perspective, the S&P/ASX 200 Health Care Index has climbed 0.7% in the past month.

The post Can ASX cannabis shares ever fully recover? 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:

Argosy Minerals Limited (ASX: AGY)

The Argosy Minerals share price is up almost 7% to 35.2 cents. This morning the lithium developer revealed that the development of its Rincon project in Argentine is both on time and on budget. Argosy expects to be producing the white metal within the next three months.

Cann Group Ltd (ASX: CAN)

The Cann share price is up a massive 26% to 29 cents. Investors have been buying this cannabis company's shares after it announced the receipt of a GMP licence for its Mildura facility. This allows Cann to produce active pharmaceutical ingredients and hard capsules and conduct GMP-approved activities at its existing chemistry and microbiology laboratories.

OZ Minerals Limited (ASX: OZL)

The OZ Minerals share price is up 1.5% to $18.00. This gain appears to have been driven by a positive broker note out of UBS. Although the broker has downgraded its earnings estimates to reflect OZ Minerals' recent update, it still sees plenty of value in its shares. As a result, the broker has upgraded the copper producer's shares to a buy rating with a $23.65 price target.

Pointsbet Holdings Ltd (ASX: PBH)

The PointsBet share price is up 13% to $2.73. This is despite there being no news out of the sports betting company. However, PointsBet shares have been on a bit of a roll recently. This follows news that SIG Sports Investment Corp became its largest shareholder earlier this month via a $94.16 million investment. This has eased concerns that a capital raising will be required in the near future.

The post Why Argosy Minerals, Cann, OZ Minerals, and PointsBet shares are pushing higher appeared first on The Motley Fool Australia.

This comes after the cannabis company announced a positive update regarding its Mildura facility.

At the time of writing, Cann shares are fetching at 27.5 cents, up 19.57%.

Cann secures GMP licence

Investors are bidding up the Cann share price following the company's approval to manufacture active pharmaceutical ingredients (API).

According to its release, Cann advised it has received a GMP manufacturing licence from the Therapeutic Goods Administration (TGA).

This allows Cann to produce API and hard capsules and conduct GMP-approved activities at its existing chemistry and microbiology laboratories.

The milestone certification could lead to an expanded sales base as the company can now perform in-house tests to meet domestic and overseas regulatory requirements.

Cann noted that obtaining the GMP licence enables medicinal cannabis products to be sold in Australia and for export markets. The latter however is subject to further approvals.

Cann CEO, Peter Crock touched on the achievement, saying:

GMP licencing is the regulatory capstone of the Mildura facility, allowing us to cultivate, extract, manufacture, test, and supply finished products entirely in-house. With the licence in place, we can now add additional GMP capabilities in response to market demands.

About the Cann share price

Despite today's strong gains, the Cann share price is down 7% in 2022.

When looking further out, the company's shares are down 20% over the last 12 months.

Based on valuation metrics, Cann presides a market capitalisation of around $87.28 million.

The post Why is the Cann share price smoking out the ASX by 20% today appeared first on The Motley Fool Australia.

It wasn't too long ago when all a company needed to do to garner investor interest was mention they were involved in medicinal or recreational cannabis research or production. That was often enough to see speculators pile in, drawn by the promise of new legal markets opening up across the world.

More recently ASX cannabis shares have been shunted out of the spotlight amid soaring commodity and energy prices.

Below we look at five of the top ASX companies operating in the legal marijuana sector. Three are posting strong gains over the past 12 months while two are deep in the red.

For some context, the All Ordinaries Index (ASX: XAO) is up 1.6% since this time last year.

First, the two ASX cannabis shares that have been slipping.

These shares have faced some headwinds

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

Shares in the ASX cannabis company closed as high as $1.01 back in November 2017, in the months leading up to Canada's decision to legalise recreational use.

Since then, Creso has struggled. Over the past year, shares are down 55.8%, currently trading for 5.3 cents.

Another ASX cannabis share that's lost ground this year is Cann Group Ltd (ASX: CAN).

The company cultivates cannabis for both medicinal and research purposes.

Cann traded at $4.01 per share back in January 2018. As with Creso, this was also during the time that the global media were throwing the spotlight on Canada's pending marijuana legalisation amid similar moves underway by numerous US states.

The Cann Group share price is down 23.3% over the past 12 months, currently trading for 33 cents.

Which brings us to the ASX cannabis share gainers…

These ASX cannabis shares have smashed the one-year benchmark returns

Among the big gainers this past year is Emyria Ltd (ASX: EMD).The clin ical-stage biotech company is strongly focused on cannabinoid medicines.

Emyria is a relative newcomer to the ASX, having listed on 12 February 2020. Shares traded at all-time highs of 44 cents in November last year.

The Emyria share price currently stands at 29 cents, up 26% in 12 months.

Up next, we have Incannex Healthcare Ltd (ASX: IHL).

The cannabinoid and psychedelic compound medicine development company hit five-year highs in early March this year, trading for 68 cents per share.

Since then, shares have retraced to the current 46 cents. Still, that's up an impressive 84% since this time last year.

And rounding off our list, the ASX cannabis share with the biggest gain is Cronos Australia Ltd (ASX: CAU).

Operating in the healthcare industry, the company offers both THC and CBD products.

Cronos shares hit record-highs of 38 cents in February this year. The Cronos share price currently stands at 28 cents, up a whopping 129.2% over the past 12 months.

That's one ASX cannabis share that's still smoking hot.

The post Remember when ASX cannabis shares were smoking hot? Where are they now? appeared first on The Motley Fool Australia.

• ASX cannabis shares could benefit from new COVID-fighting research
• Cannabidiol (CBD) has proven effective in mice
• Researchers hope to launch human trials

ASX cannabis shares haven't exactly shot the lights out over the past full year.

At all.

The Creso Pharma Ltd (ASX: CPH) share price, for example, is down 48% over the past 12 months.

Little Green Pharma Ltd (ASX: LGP) has done a bit better. But the ASX cannabis share is still down 17% since this time last year.

As for medicinal shareholders in marijuana cultivator Cann Group Ltd (ASX: CAN), they've watched the stock fall a painful 55%.

With this month's sharp correction, the All Ordinaries Index (ASX: XAO) has given back much of its gains. But for some comparison, the index remains up 3.6% over the past full year.

With that said, ASX cannabis shares could be in for some healthy tailwinds down the line.

That is if breaking research pans out to show that cannabidiol (CBD), an active ingredient in cannabis, could help prevent COVID-19 infections.

Can CBD help prevent COVID infection?

While there's no definitive answer yet, Live Science reports that research suggests CBD "could block the coronavirus".

Not just any low potency CBD though. But rather "the kind of medical-grade … CBD used to treat seizure disorders".

Should that prove out, it would certainly be welcome news to ASX cannabis shares involved in medicinal production.

Scientists involved in the study caution that CBD won't be a silver bullet that will bring down the pandemic on its own.

However, according to Live Science:

The researchers are hopeful that the compound could be an additional tool in the fight against the SARS-CoV-2 virus — and perhaps other viruses. So far, the team has shown that the compound can help mice fight off COVID-19, and they've turned up suggestive evidence that it might be helping humans, too.

The study's leader, Marsha Rosner, said, "We don't know yet if CBD can prevent COVID, but we think our results provide a strong case for conducting a clinical trial."

While a human clinical trial has yet to be formulated, there are some early promising signs.

According to Rosner, "We show that CBD can stop replication of SARS-COV2 in cells in a dish and that it acts at least up to 15 hours after infection, so that suggests it might be effective even at early times after viruses enter cells."

ASX cannabis shares minnows in the global market

Medicinal marijuana has only been legally available in Australia since November 2016.

And with the past year's sell-off, even the bigger ASX cannabis shares are minnows compared to some of their overseas peers in the United States and Canadian markets.

Cann Group, for example, has a market cap of $96 million. Little Green Pharma's market cap stands at $107 million while Creso Pharma is valued at $101 million.

Certainly not blue-chips.

But if research pans out to show CBD can help stave off COVID infections, they could see some growth potential.

The post ASX cannabis shares in spotlight amid COVID prevention research 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.

Of the 9 stocks broadly falling into the 'ASX cannabis share' category, 6 saw their share prices fall while 3 gained in FY21.

Creso Pharma Ltd (ASX: CPH) was the top performer in FY21, gaining 352%.

Cann Group Ltd (ASX: CAN) came in near the bottom of the list, with shares falling 57%.

Unlike stocks producing other commodities – from gold to almonds – the price of marijuana doesn't impact companies involved in medicinal and recreational cannabis production nearly as directly.

There are numerous factors that determine any listed company's share price. These include quality of management, debt levels, market growth outlook, and barriers to entry for any would-be competitors, to name a few.

But you just need to look at how ASX gold shares perform during a time of rising gold prices relative to a time of falling gold prices (as we've experienced recently) to see the price of gold has a strong impact on their share prices.

The march to legalisation

Cannabis, however, is a rather unique commodity, in that it remains illegal across much of the world.

With that in mind, ASX cannabis shares, and indeed pot stocks across the world, tend to do well when the global legal market expands as the stigma of illegality is gradually stripped away.

As you're likely aware, the illicit nature of cannabis has been inexorably changing, led by Uruguay.

Yes, Uruguay.

In 2013 the tiny South American nation became the first on Earth to fully legalise cannabis. Since then, Canada and many states in the US have followed suit, with Mexico debating similar legislation.

A potential $63 billion market by 2025

Online investment platform eToro's market analyst Josh Gilbert points to a forecast by JPMorgan that estimates legal cannabis sales could hit US$45 billion (AU$63 billion) by 2025.

Gilbert told the Motley Fool this "will see most cannabis stocks scrabbling for market share. As cannabis sales increase, the sector is becoming more and more saturated".

While legal recreational use is a growing segment, the medicinal properties of cannabis are helping drive wider global acceptance.

"The plant's contribution to pain relief, cancer treatment and other medical issues has been well researched and documented, and a booming industry has started to grow around it," Gilbert said.

With New York slated to green-light recreational marijuana use in 2022, the global cannabis market is growing like a weed.

A US listed pot stock to consider

Gilbert points to Canopy Growth Corp (NASDAQ: CGC) as an international share that could do well in an expanding legal cannabis market:

The largest cannabis stock by market cap, Canopy Growth, has arguably positioned itself to benefit from the flourishing legalisation of cannabis, by focusing on target countries such as Canada, the US and Germany.

With Canada having fully legalised recreational marijuana alongside its medicinal uses, companies have been turning to infusing food and drinks with THC, the active ingredient that gets users "high". Gilbert said that edibles and beverages accounted for 47% of Canopy Growth's sales in FY21.

He added:

Canopy Growth is in the prime position to benefit from all use of cannabis products, whether that is medicinal or recreational. Its financial position provides an advantage against its peers, thanks to its partnership with Constellation Brands in the US. Constellation Brands owns around 38.6% of Canopy Growth, which has helped grow its beverage business and further enhance its potential for profitability.

Revenues are also continuing to grow, with its FYQ1 earnings in August 2021 demonstrating a 23% increase year-over-year. Despite this, the company's revenues came in short against analyst expectations.

Up 1.2% over the past 12 months, Canopy's share price is down 37% year-to-date. Gilbert says this is an important reminder "that investing in cannabis stocks doesn't come without its risks".

He added: "The industry has also experienced a long run of underperformance, but further legalisation of cannabis globally should be the catalyst for share price growth."

How have these 2 ASX cannabis shares been tracking in FY22?

Now let's get back to the 2 ASX cannabis shares mentioned above.

We know how they performed in FY21, the financial year ending 30 June. So how have they done since the start of FY22?

Creso Pharma, the top performer last financial year, is down by 11% since the opening bell on 1 July.

Cann Group, one of the worst-performing ASX cannabis shares in FY21, is continuing to struggle in the new financial year, with shares down by 24% since 1 July.

These ASX cannabis shares, among others, will certainly be eyeing the potential market growth as more US states, and potentially more nations, move to legalise medicinal and recreational marijuana.

The post ASX cannabis shares eyeing $63 billion in legal global sales appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are tumbling lower:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is down 5.5% to $6.41. Today's decline appears to have been driven by regulatory concerns in China. This follows news of government crackdowns in the Chinese educational sector. Whether regulators take a look at the infant formula market, only time will tell. But there are fears that the government could use regulatory measures to favour domestic dairy brands.

Cann Group Ltd (ASX: CAN)

The Cann share price has crashed 16% to 32 cents. This follows the announcement of another capital raising by the cannabis company. Cann is aiming to raise a further $20 million at a discount of 27.5 cents per new share. Should the company complete this capital raising successfully, it will mean it has raised $138.2 million from investors since listing. Cann recorded sales of $4.3 million in FY 2021. It is raising these funds to help it deliver substantial cost savings as it ramps up production.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is down 3% to $14.45. This travel agent's shares have come under pressure recently amid concerns that the Delta variant of COVID-19 could push back the travel market recovery and lead to Flight Centre burning through significantly more cash than previously hoped.

GPT Group (ASX: GPT)

The GPT share price is down 2.5% to $4.63. Investors have been selling the property company's shares after it withdrew its guidance for FY 2021. According to the release, GPT has withdrawn its Funds From Operations (FFO) and distribution guidance for 2021 due to uncertainty caused by COVID-19 lockdowns in Melbourne and Sydney.

The post Why a2 Milk, Cann, Flight Centre, & GPT shares are tumbling lower appeared first on The Motley Fool Australia.

At the time of writing, the Cann share price is down 14% to 32.5 cents.

What did Cann announce?

This morning Cann announced an institutional placement and a share purchase plan aiming to raise a total of $20 million.

This comprises a $10 million institutional placement and a $10 million share purchase plan, with the funds being raised at 27.5 cents per new share. This represents a 27.6% discount to the Cann share price prior to its trading halt.

According to the release, the proceeds from the capital raising will be used to invest in initiatives which are expected to deliver substantial cost savings as Cann moves to large scale production with the commissioning of its new manufacturing facility near Mildura.

Furthermore, the funding will be used to expedite and strengthen Cann's in-house extraction, laboratory and manufacturing capabilities. This is expected to de-risk the company's supply chain and lower costs by reducing its reliance on third party manufacturers and service providers.

How many capital raisings?

Should the company complete this capital raising successfully, it will mean it has raised $138.2 million from investors since listing.

This comprises a $78 million capital raising in 2017 at $2.50 per new share, a $40.2 million capital raising in August 2020 at 40 cents per new share, and now $20 million at 27.5 cents per new share.

And despite raising $138.2 million from investors, the company's market capitalisation is just $105.6 million (prior to today's movements).

Clearly, the funds raised have not created value for shareholders. In fact, if you invested $10,000 in the 2017 capital raising, your investment would be worth just $1,520 today. So rather than creating value, Cann shareholders have seen significant wealth go up in smoke.

The Cann share price is down 46% in 2021.

The post Cann (ASX:CAN) share price crashes 14% after announcing another capital raising 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.