Below, we take a look at the new manufacturing agreement that appears to be spurring investor interest in the ASX medicinal cannabis company.

What new manufacturing agreement was announced?

Epsilon Healthcare's share price is soaring after the company reported it has executed a binding term sheet and manufacturing agreement with Cannim Australia Pty Ltd.

Cannim, established in 2017, cultivates cannabis in Jamaica and Australia. The privately held company has engaged Epsilon as its Australian GMP manufacturing partner.

Epsilon's Southport Facility in Queensland will produce medicinal cannabis products from marijuana supplied by Cannim for supply into Australian and global export. Epsilon will receive payment from Cannim for its manufacturing services on a per-order basis

The initial agreement runs for 2 years.

According to the release, the first cannabis derived dried flower products have already been delivered and are available to patients by Epsilon under Cannim's HummingBud brand.

Under the binding term sheet, the companies have agreed to further collaboration and manufacture over next 2 years.

Management commentary

Commenting on the agreement, Epsilon Healthcare CEO Jarrod White said:

Matching our high-volume EU GMP compliant Southport Facility with Cannim's high volume GACP Jamaican medicinal cannabis places both companies in a strong position to deliver significant volumes of high-quality medicines for both the Australian and global export markets.

The partnership contemplates all areas of the Epsilon value chain, from local import and handling of dried product expertise, to export, and assisting in the logistics and distribution of the final product. This is reflective of the significant progress and capability improvements at our Southport facility in the preceding 12 months.

Epsilon Healthcare share price snapshot

Despite today's big boost, the Epsilon Healthcare share price remains down 36% year-to-date. By comparison the All Ordinaries Index (ASX: XAO) is up 12% so far in 2020.

The last month has been kinder to Epsilon Healthcare shareholders, with shares up 19% since 21 September.

The post Epsilon Healthcare (ASX:EPN) share price rockets 24% on new agreement appeared first on The Motley Fool Australia.

The company entered a trading halt on Monday before the market open pending today's announcement. Epsilon's share price closed at 15 cents on Friday.

We take a look at the announcement from the microcap ASX cannabis share.

What did Epsilon announce?

The Epsilon share price is soaring after the company reported it has entered into a partnership with The Valens Company Inc (TSX: VLNS) for access to Epsilon's Southport Manufacturing Facility.

Valens is involved in the production of cannabis products. Its shares currently trade on the Toronto Stock Exchange, and it has applied to list on the NASDAQ.

The partnership with Epsilon will aid Valens' growth strategy into international GMP markets via access to Epsilon's GMP manufacturing capability at the Southport Facility. Southport is the largest cannabis extraction facility in the Southern Hemisphere.

Epsilon has been granted a licence to use Valens IP to streamline operations at its Southport Facility. Valens will also provide personnel and support.

As part of the partnership, Valens won't sell any medicinal cannabis in Australia or New Zealand that doesn't come from the Southport Facility. Valens will also "fund all future operational and capital expenditure" at the facility in return for access to up to 85% of the output.

What else is moving the Epsilon share price?

Epsilon's share price may also be getting a lift today from the company's accompanying announcement that it has entered into a Share Sale Agreement with Cannvalate Pty Ltd to acquire AlternaMed Pty Ltd. This includes Cannvalate's portfolio of IP covering 3 "novel cannabinoid therapeutic agents with a view to Schedule 3 medicines production".

Epsilon will issue some 28 million shares, worth $4.3 million at 15 cents per share, to acquire AlternaMed. The acquisition remains subject to customary approvals.

Commenting on the announcements, Valens' CEO, Tyler Robson said:

We are excited to work with the largest and most advanced cannabis manufacturing facility in the Southern Hemisphere to distribute GMP products, and look forward to advancing our product distribution capabilities through our continued partnership with Cannvalate.

Epsilon's CEO, Jarrod White, added:

Having worked with the teams at Valens and Cannvalate over the preceding months to achieve what is a transformational partnership for Epsilon and its Southport Facility, I am excited to see the maturing of Epsilon's core assets and business into commercial production with experienced partners from established markets.

With this long term strategic partnership now agreed, Epsilon is well placed to be a leading contract GMP manufacturer of medicinal cannabis medicines in the region.

Epsilon share price snapshot

The Epsilon share price is down 30% year-to-date. This compares to a gain of 10.5% posted by the All Ordinaries Index (ASX: XAO) in 2021.

Over the past month, Epsilon's share price is up 16%.

The post Why the Epsilon (ASX:EPN) share price is soaring 16% today appeared first on The Motley Fool Australia.

California, America's most populous state and the fifth largest economy in the world, was legalising the recreational use of cannabis, and Canada had announced it would be doing the same. A new, potential multi-billion-dollar global industry in recreational cannabis was basically being invented overnight.

But jump forward a couple of years and the winds have gone out of the sales of most pot stocks. Take AusCann Group Holdings Ltd (ASX:AC8) as an example. In January 2018, it seemed like AusCann could grow into the leading medical marijuana company in Australia, and excitement around its prospects had pushed its share price up towards $2. But since then its share price has trended steadily downwards. Its shares are now valued at just $0.215 and its total market cap has dipped under $70 million.

The share price charts of other once promising companies, like Cann Group Ltd (ASX:CAN) and THC Global Group Ltd (ASX:THC) tell a similar story. Despite all the hype around legalisation, it seemed like market saturation meant that only those few major players at the very top could actually turn a profit. In the US state of Oregon, one of the first states in the country to legalise the recreational use of marijuana, new sellers flooded the market, driving pot prices down.  

However, something curious has been happening over the last month. The share price of Cann Group has doubled in just a few weeks, while that of fellow small-cap Creso Pharma Limited (ASX:CPH) is up an astounding 650% since early November.

What is driving the gains?

A couple of key global events have been behind the surge in ASX pot stock valuations. Firstly, in early December, following recommendations from the World Health Organisation, the UN removed medical marijuana from its list of Schedule IV narcotics. Schedule IV contains harmful and highly addictive drugs like heroin and other opioids.

Many governments look towards these UN schedules for guidance on how to classify drugs, and so this downgrade could potentially lead to further global acceptance of medical marijuana.

The second key event was the passing of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act by the US House of Representatives. While many US states have legalised cannabis, it still remains illegal under federal law. The MORE Act aims to decriminalise weed at the federal level and erase non-violent federal marijuana convictions.AC8

The MORE Act is unlikely to pass a Republican-controlled Senate, but it is still a demonstration of continually changing attitudes towards marijuana in America. And it has ramifications on a global scale, with many investors now renewing their interest in local Australian cannabis companies.

However, the same problems of market saturation and high competition still remain, meaning picking winners in this race is still an incredibly risky enterprise.

The post ASX pot stocks have been skyrocketing in December appeared first on The Motley Fool Australia.

Who is Elixinol Global?

Elixinol Global is an ASX cannabis company with a portfolio of worldwide operations. Its Australian offerings are limited to its subsidiary, Hemp Foods Australia Pty Ltd. Hemp Foods Australia focuses on manufacturing and wholesaling hemp-based foods, materials and products. However, its global offerings are more extensive.

Elixinol makes and sells both hemp and cannabidiol (CBD) products across the United States, Latin America, Europe and the United Kingdom, as well as in Japan and South Africa. The legal status of CBD (a component of psychoactive cannabis, but not industrial hemp in meaningful amounts) varies around the world, which means that Elixinol can only sell these products in certain markets (which doesn't include Australia at this time).

Elixinol is a dual-listed company, appearing on the ASX, as well as on the Over-the-Counter (OTC) markets in the US. It only IPOed on the ASX back in January 2018, where it hit the boards at $1.57 a share. Looking at that price, it's not hard to conclude Elixinol has had a rough trot since then. The company did have a boom of sorts, rising from the IPO price to a high of $4.58 in May 2019. However, even after today's rise, Elixinol shares are down roughly 95.5% from those highs.

Why is the Elixinol share price surging today?

Elixinol shares are not the only ASX cannabis shares on the rise today. It looks as though we are seeing a sector-wide move, which indicates some macro or external factors at play. To illustrate, Elixinol's fellow ASX cannabis company Cann Group Ltd (ASX: CAN)'s shares are up 6.25% to 34 cents a share, whilst THC Global Group Ltd (ASX: THC) shares are up 7.14% to 22 cents and Althea Group Holdings Ltd (ASX: AGH) shares are up 14.81% to 46 cents.

The external factor could be that several US states legalised either recreational or medical cannabis use in last week's elections. According to our Fool colleagues across the Pacific, the states of New Jersey, Arizona, Montana and South Dakota look to have successfully voted to legalise recreational use, while the conservative state of Mississippi has legalised cannabis for medical use only.

Following these results, it means that 15 out of the 50 states in the USA have now legalised recreational use, with 35 permitting medical use as well. Being the world's largest economy, it's not hard to view these developments as good news for ASX cannabis companies, and by extension, any cannabis company around the world.

An impressive quarterly update

However, the Elixinol share price is still vastly outperforming its peers in the cannabis space today. So what might explain this? Well, last week, the company posted a quarterly update to the markets, which might have gone unnoticed until today amidst the election drama.

In this update (covering the quarter ending 30 September), Elixinol told the markets that its quarterly revenue had grown by a hefty 18% compared with the previous quarter to $4 million. It also succeeded in slashing costs and cash outflow, which was at $3.5 million for the quarter, down from $6.2 million in the previous quarter, and down from $9 million in the quarter before that.

The post ASX stock of the day: Elixinol Global (ASX:EXL) shares blaze new highs appeared first on The Motley Fool Australia.

By the end of the day, Cann Group Ltd (ASX: CAN) led the falls, down 4.69% to 3.05 cents per share.

THC Global Group Ltd (ASX: THC) wasn't far behind with a 4.17% slide to 23 cents a share.

Elixinol Global Ltd (ASX: EXL) was also feeling the pain, down 3.33% to 14.5 cents per share.

And Althea Group Holdings Ltd (ASX: AGH) was 2.27% lower at 43 cents a share.

So what was giving the market red eyes today in this space? Far from the, um, highs of a few years ago, today seems to be giving investors another ounce of regret.

NZ referendum induces investor paranoia

We can probably put today's negative moves in the cannabis sector down to the newly released results from the referendum that New Zealand held recently to legalise recreational cannabis use. The referendum was held at the same time as the New Zealand parliamentary elections a fortnight ago (in which the Labour Party's Jacinda Ardern won a landslide victory and a rare majority government), but results are only being released today.

According to reporting from the aptly-named Vice.com, the New Zealand cannabis referendum was not successful, with the preliminary count showing 53.5% opposing legalisation. The reporting suggests that unless late vote counting heavily favours the 'Yes' column, the prospects of legalised marijuana in New Zealand are up in smoke, at least for now. It doesn't look like there will be a purple haze of celebration across New Zealand tonight.

On a side note, a separate referendum to legalise voluntary euthanasia has been successful.

What does this mean for ASX cannabis shares?

Well, this isn't good news to be sure. A legalised market for recreational cannabis would have likely been a boon for companies like Cann Group and Althea Holdings. Not only would it have resulted in a potentially massive market just across the Tasman for cannabis products, but it would have also likely increased the pressure for Australian states to follow suit over the next few years. That prospect now looks a lot dimmer in light of this result.

And it's not as though ASX cannabis investors could have used some good news either. Cann Group shares are today more than 90% below where they were back in early 2018. As are THC Global shares (more than 75% down from early 2018) and Althea (down over 60% since July 2019).

It looks as though ASX cannabis investors will have to wait a little longer to turn their current headaches into new highs.

The post Here's why ASX cannabis shares are falling today appeared first on The Motley Fool Australia.

Shares in the medicinal cannabis group tanked 7.1% to 39 cents in after lunch trade when the S&P/ASX SMALL ORDINARIES (Index: ^AXSO) and S&P/ASX 200 Index (Index:^AXJO) gained around 0.1% each.

Investors dumped the stock after Aurora Cannabis Inc (TSE: ACB) informed Cann Group that it sold its 11.84% shareholding in the ASX company.

Cann Group share price takes a blow

The sale was done via off-market trades to a small number of undisclosed buyers after the market closed on Friday.

Management tried to appease shareholders by stating that Aurora's decision to sell down the shares was "consistent with Aurora's current strategic priorities".

It also added that Aurora's exit won't have an impact on Cann Group's business plans. Cann Group remains focused on developing a growing and diversified supply base with B2B customers in Australia and overseas.

Off-take partner exits right

But investors aren't listening. Aurora isn't only a substantial shareholder, but it's also a partner as it signed a five-year off-take agreement with Cann Group in March 2019.

Under the agreement, Cann Group will supply good manufacturing practice (GMP) processed dry flower, extracted resin and medicinal cannabis products to Aurora, which is one of the world's largest cannabis companies.

No commercial details were released then but it's believed to include a price review mechanism. It also allows for the inclusion of new products that the group develops.

No sugar coating the Cann Group share price fall

It's interesting that Aurora said the sale of its remaining holdings in Cann Group was inline with its strategic priorities. Back when it struck the off-take agreement with Cann Group, the CAN share price was trading at around $2 a share.

It looks like Aurora decided to bite the bullet and crystalise the loss. That perception won't help confidence in the Cann Group share price.

Let-down effect

But Cann Group isn't the only stock that's fallen out of favour with the market. In fact, the ASX medicinal cannabis sector is nursing a big hangover as it comes off a high.

The Thc Global Group Ltd (ASX: THC) share price and Creso Pharma Ltd (ASX: CPH) are also among the fallen angels.

The sector serves as a warning about how dangerous it can be to be buying hype ahead of fundamentals, even though medicinal cannabis is a real industry.

The post The Cann Group share price getting smoked after a strategic shareholder exits appeared first on The Motley Fool Australia.

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

The Northern Star Resources Ltd (ASX: NST) share price is down 1.5% to $14.70. Investors have been selling the gold miner's shares amid softness in the gold price overnight. The price of the precious metal pulled back after the U.S. dollar strengthened. The S&P/ASX All Ordinaries Gold index is down 0.25% on Wednesday.

The Sealink Travel Group Ltd (ASX: SLK) share price is down 2% to $5.08. This appears to have been driven by news that one of the travel and transport company's non-executive directors has been selling shares. According to a change of director's interest notice, Christopher Smerdon sold 100,000 shares through a series of on-market trades last week. Mr Smerdon received a total of $500,000 for the shares.

The THC Global Group Ltd (ASX: THC) share price has crashed 11% lower to 24.5 cents. This morning the cannabis company responded to a request from the ASX relating to its accounts. This follows comments by its auditor which revealed that it disagreed with THC Global's management over the application of Australian Accounting Standards and particularly is use of fair value measurements and asset impairments. THC defended its accounting practices.

The Whitehaven Coal Ltd (ASX: WHC) share price is down 3% to 94 cents. I suspect that this decline is due to profit taking after some strong gains by the coal miner's shares over the last three trading periods. Prior to today, Whitehaven Coal's shares were up over 14% since closing at 84 cents on Thursday afternoon. At the start of the month UBS put a buy rating and $2.00 price target on its shares.

The post Why Northern Star, SeaLink, THC Global, & Whitehaven Coal shares are dropping lower appeared first on The Motley Fool Australia.

At the time of writing the cannabis company's shares are up 11% to 34.5 cents.

Why was the THC Global share price in a trading halt?

THC Global requested the trading halt on Friday pending the release of an announcement relating to the receipt of an additional permit from the Australian Office of Drug Control (ODC) for its operations.

This morning the company revealed that it has received an expanded commercial cultivation permit from the ODC. This has allowed it to commence production towards the supply of medicinal cannabis medicines to an initial 6,000 Australian patients.

According to the release, THC Global will supply medicinal cannabis under the Canndeo brand. Supply will be direct to pharmacies, clinics, and hospitals, meeting the requirements of the Narcotic Drugs Act and Regulations.

In addition to this, the company advised that it has established CanndeoCare for the support of doctors and health care professionals.

CanndeoCare will provide information on prescribing as permitted by the Therapeutic Goods Act from a team of qualified healthcare professionals focused on supporting responsible and legal prescribing of medicinal cannabis.

The company's CEO, Ken Charteris, said: "We are committed to bringing lower costs and higher quality to Australian patients. Our complete control of cannabis biomass, manufacturing, supply, and support will help achieve this. We expect to supply at least an initial 6,000 patients using Canndeo medicinal cannabis on an ongoing basis commencing from Q2 2020. Further Australian patients and global exports will follow."

Elsewhere in the industry today, Althea Group Holdings Ltd (ASX: AGH) and Cann Group Ltd (ASX: CAN) shares are also on the rise. They are up 14% and 12%, respectively, at the time of writing. This appears to have been driven by improving investor sentiment.

The post Why this cannabis company is smoking the market today appeared first on The Motley Fool Australia.

On Friday the medicinal cannabis company's shares climbed as much as 4% higher before ending the day with a gain of 1.5% to 38 cents.

Why did the THC Global share price push higher?

Investors were buying THC Global's shares after the release of its fourth quarter update on Friday.

That update revealed that cash receipts in the fourth quarter came to $1.87 million. This represents a 30% quarter on quarter increase and a 189% increase on the prior corresponding period.

This led to THC Global's FY 2019 unaudited revenue coming to $4.79 million, up 81% on FY 2018's revenue.

The company's hydroponics equipment business, Crystal Mountain, was the main driver of revenue growth in FY 2019. Management advised that this was thanks partly to the broadening of the Crystal Mountain product offering over the last few months.

It was also boosted by the introduction of new value-add service offerings to cannabis cultivator clients and its expansion across Canada from its current west coast base in Vancouver.

Management appears confident the Crystal Mountain business will continue its positive form in FY 2020. It revealed that it expects its revenue to exceed $7 million on a conservative basis next year.

Medicinal cannabis sales.

Management also appears optimistic that its medicinal cannabis sales could grow in FY 2020.

At present THC Global is an exclusive distributor of Endoca cannabidiol (CBD) based medicines to patients in Australia and New Zealand. Sales of the Endoca medicines have been strong, particularly in New Zealand which has a less restrictive medicinal cannabis access scheme.

But from late in the first quarter of FY 2020, the company will be supplying a full range of Canndeo branded medicines in Australia and New Zealand. This product is being sourced from its own production facility as it scales up and initially supplemented by imported European product through a white labelling agreement with MGC Pharmaceuticals (ASX: MXC).

Furthermore, as production of medicinal cannabis from the company's Southport Facility scales up, the company will be able to offer price competitive pharmaceutical GMP medicines to Australian patients and the global export market.

At the end of the period the company had cash in the bank of $3.55 million and no debt.

The post Why this ASX cannabis share raced 4% higher on Friday appeared first on The Motley Fool Australia.

Four shares that have not let that hold them back today are listed below. Here's why they are storming higher:

The Data#3 Limited (ASX: DTL) share price has jumped 7.5% to $4.34. This morning the technology solutions company provided an update on its expectations for the first half. Data#3 revealed that it expects to report consolidated net profit before tax (NPBT) at the top end of its guidance range of $11 million and $12.5 million. This compares to the $9 million it achieved in the prior corresponding period.

The Maca Ltd (ASX: MLD) share price is up 2% to 99.5 cents. This morning the mining and civil services company advised that it will cease operations in Brazil this month. This follows the early termination of the contract at Antas for Oz Minerals Limited (ASX: OZL). This news was offset by several new project awards. One is a $9.5 million construction contract by VicRoads for the Bacchus Marsh Road Stage 2A Safety Improvements.

The Pact Group Holdings Ltd (ASX: PGH) share price has risen 3.5% to $2.78. Investors have been buying the packaging company's shares in response to news that it is planning to divest its Contract Manufacturing division. Management believes this will simplify its business, generate stronger returns for shareholders, and strengthen its balance sheet.

The THC Global Group Ltd (ASX: THC) share price has rocketed almost 12% to 43 cents. The cannabis company's shares have raced higher after it announced that the Australian Therapeutic Goods Administration has granted it a licence to manufacture therapeutic goods from its Southport Facility. Management revealed that it will now seek to complete negotiations for the export supply of cannabis medicines.

The post Why Data#3, Maca, Pact Group, & THC Global shares are storming higher appeared first on The Motley Fool Australia.

In morning trade the cannabis company's shares are up 19% to 46 cents.

Why is the THC Global share price rocketing higher?

Investors have been buying THC Global's shares after it announced that the Australian Therapeutic Goods Administration (TGA) has granted it a licence to manufacture therapeutic goods from its Southport Facility.

The licence, which is more commonly known as a GMP Licence, means it now has all the licences required to commence the commercial manufacture of medicinal cannabis.

The company's Southport Facility is the largest pharmaceutical bio-floral extraction facility in the Southern Hemisphere and is now one of the world's largest pharmaceutical GMP licenced facilities for the manufacture of medicinal cannabis.

What is a GMP Licence?

A GMP Licence is a mandatory requirement for the commercial manufacture of medicinal cannabis in Australia. It is also recognised for the supply of pharmaceutical goods in 29 countries across Europe, Asia and, North America (Canada).

The licence authorises THC Global to manufacture Active Pharmaceutical Ingredient (API) extracts, to formulate and package medicines, conduct on-site testing and analysis, and supply medicinal cannabis for human trials in Australia and globally.

What now?

The company revealed that it will now seek to complete negotiations for the export supply of cannabis medicines. The European design and equipment origin of the Southport facility meets key requirements for entering the rapidly expanding European market.

Management believes this differentiates THC Global from almost all established cannabis companies internationally.

THC Global's chief executive officer, Ken Charteris, commented: "THC Global has now received a pharmaceutical GMP licence issued by a government authority, which remains a rarity in the cannabis world. We anticipate near-term completions of commercial negotiations with multiple parties interested in our scalability, quality of production and ability to compete on price globally."

Also on the move this morning is cannabis company Creso Pharma Ltd (ASX: CPH). Its shares are up 10% to 21 cents after announcing that it has now sold over three million anibidiol portion sachets since it was launched in late 2017.

The post Why this ASX cannabis company is rocketing 19% higher today appeared first on The Motley Fool Australia.

In morning trade the cannabis company's shares are up 3% to 3.8%. They were up as much as 8% at one stage.

Why is the MCG Pharma share price on a high?

Investors have responded positively to an announcement this morning which revealed that it has entered into a supply agreement with THC Global Group Ltd (ASX: THC).

According to the release, MGC Pharma will provide THC Global with an immediate supplementary source of medicinal cannabis products. These products will then be packaged and made available to patients under its Canndeo brand.

THC Global expects these products to launch in Australia and New Zealand during the first quarter of calendar year 2020.

The agreement also provides for the two companies to collaborate on the future supply of active pharmaceutical ingredients (API) extracts as well as other finished products. This includes product from THC Global's Southport Facility.

MGC Pharma's managing director and CEO, Roby Zomer, was pleased with the agreement.

He said: "We are pleased to partner with THC Global to produce and supply white label Canndeo branded phytocannabinoid products. With the ever-growing use of phytocannabinoids for medicinal purposes, MGC Pharma is well placed to work with companies such as THC Global to manufacture quality and cost effective phytocannabinoid products."

"We expect that further discussions between MGC Pharma and THC Global on mutual exports of product to respective international markets will be beneficial to all going forward, particularly as we develop our ~15,000m2 GMP compliant pharma production and research facility in Malta," he added.

THC Global licence update.

Shortly before the market open THC Global requested a trading halt.

According to the release, it requested the trading halt pending an announcement relating to the receipt of a licence to manufacture therapeutic goods from the Australian Therapeutic Goods Administration.

This would be a big positive for the company and could mean it shoots higher along with MGC Pharma when it returns to trade.

The post Why these ASX cannabis shares are starting the week on a high appeared first on The Motley Fool Australia.

Many of the ASX-listed producers have struggled to climb higher and, in many cases, have experienced heavy losses. So is there hope for long-term investors in the Aussie pot stocks?

What's been happening to ASX cannabis shares

Many of the biggest producers have been hammered lower as investor optimism has faded throughout the year.

The AusCann Group Holdings Ltd (ASX: AC8) share price is now down a whopping 71.43% for the year. The group still has a market cap of $57.07 million but is at the bottom of its 52-week trading range.

Cann Global Ltd (ASX: CGB) shares fell 6.67% lower to a new 52-week low of $0.014 per share. That's more than a 50% decline from where the Aussie producer's shares started the year.

THC Global Group Ltd (ASX: THC) has had a volatile year and has now slumped 62.00% since the start of 2019 in what is a clear trend amongst ASX cannabis shares.

The Cann Group Ltd (ASX: CAN) share price climbed 2.38% higher yesterday but is still trading near its 52-week low at $0.43 per share. 

Will 2020 see a rebound in share prices?

It's difficult to say where the ASX cannabis shares are heading in 2020. There have been a number of updates from the producers in 2019 but concerns of oversupply have weighed on valuations.

I think there are promising signs but ultimately it looks like it'll be a war of attrition. I think it's unlikely we'll see so many ASX cannabis shares in a decade's time, so it's a matter of who is likely to win that race.

Stronger ties with Canada and the United States could help with short-term earnings given their relative market maturity. However, that also means there are big international competitors in the market.

Shareholders will be hoping for more sales agreements and improved cash flow but many of these groups are still relatively young.

If 2020 sees improved legislation here in Australia and more trade into key Asian markets, that could be a recipe for success for the best and brightest ASX cannabis shares.

The post Can ASX cannabis shares rebound in 2020? appeared first on The Motley Fool Australia.

Four shares that have not let that hold them back today are listed below. Here's why they are storming higher:

The Adairs Ltd (ASX: ADH) share price has rocketed 18% higher to $2.10. Investors have been buying the homewares company's shares after it announced a major acquisition. Adairs has entered into a binding agreement to acquire all of the shares of Mocka Limited for a notional initial enterprise value of ~NZ$80 million (A$75.5 million). Mocka is an online retailer of home and living products operating in both Australia and New Zealand. The acquisition is expected to be highly accretive to earnings.

The Gold Road Resources Ltd (ASX: GOR) share price is up 8% to $1.17. This follows the gold miner's mineral resource update for its Gilmour and Renegade assets this morning. That update revealed a maiden estimate of 297,600 ounces at an A$1,850 per ounce gold price assumption.

The oOh!Media Ltd (ASX: OML) share price has stormed 19% higher to $3.57. Investors have been buying the outdoor advertising and media company's shares after it upgraded its FY 2019 earnings guidance. After the market close on Tuesday, oOh!Media revealed that it expects FY 2019 EBITDA in the range of $138 million to $143 million. This compares to its previous guidance of $125 million to $135 million. Improved bookings for September and the fourth quarter were behind the upgrade.

The THC Global Group Ltd (ASX: THC) share price has jumped 9.5% to 40.5 cents. This morning the cannabis company revealed that it has completed the first farm-to-pharma processing of medicinal cannabis at its Southport Facility. The Southport Facility is the largest pharmaceutical bio-floral extraction facility in the southern hemisphere and is licensed and permitted to process medicinal cannabis.

The post Why Adairs, Gold Road, oOh!Media, & THC Global shares are storming higher appeared first on The Motley Fool Australia.

At the time of writing the cannabis company's shares are up 11% to 41 cents.

Why were THC Global's shares in a trading halt?

THC Global requested the trading halt whilst it prepared an update on production at its Southport Manufacturing Facility.

It has now released that update and revealed that it has completed the first farm-to-pharma processing of medicinal cannabis at the facility.

The Southport Facility is the largest pharmaceutical bio-floral extraction facility in the southern hemisphere and is licensed and permitted to process medicinal cannabis.

Management believes the first production of medicinal cannabis by the company is a significant milestone for both it and the Australian medicinal cannabis industry. It signifies the commencement of its production activities and will now be able to offer large scale medicinal cannabis production.

It also feels this validates its farm-to-pharma operation capability, which it believes lays the path for the company to scale up its cultivation and extraction activities through 2020.

THC Global's chief executive officer, Ken Charteris, said: "THC Global's medicinal cannabis team have achieved a major milestone today both for the Company and for the Australian medicinal cannabis industry by producing our first farm-to-pharma medicinal cannabis at our Southport Facility, in advance of our commercial scale launch next year."

"THC Global has ready-to-go production assets within Australia capable of servicing over 250,000 patients in addition to the global export market, making THC Global a leader in the Australian medicinal cannabis industry, and in prime position to be a global exporter of Australian medicinal cannabis medicines," he added.

Zelda update.

It isn't just THC Global making an announcement today. This morning Zelira Therapeutics Ltd (ASX: ZLD), formerly known as Zelda Therapeutics, announced that it will bring its HOPE Franchise to the state of Louisiana with a licensing agreement.

This agreement is expected to generate immediate revenue through a licensing arrangement which includes an up-front fee and ongoing royalties.

The post THC Global share price surges 11% higher on cannabis production update appeared first on The Motley Fool Australia.

What did Elixinol announce yesterday?

In an after-market update, Elixinol confirmed the sale of its 50.5% stake in Elixinol Japan to another major shareholder.

The Elixinol share price has plummeted in early trade, given the sale's net profit impact is an expected $2.2 million loss.

The Aussie cannabis group has sold its stake to Mr Takeshi Sakurada for consideration of JPY 1 million cash (A$13,500 on a converted basis).

The sale also includes a deferred cash payment of A$362,715 multiplied by a ratio of the 8 January 2020 closing price divided by $1.09 (less Japanese taxes). 

There is also an obligation on Elixinol Global and Elixinol Japan to engage in good faith negotiations to enter into a licence agreement by 31 March 2020.

Terms of the deal include the following:

• Non-exclusive licence in Elixinol Global's tradeworks and know-how to allow Elixinol Japan to continue operating,
• Elixinol Japan to pay royalties equal to 3% of its gross sales, and
• an indefinite term, subject to mutual agreement on termination.

How has the Elixinol share price performed this year?

It's been a tough year for ASX cannabis stocks and the performance of the Elixinol share price reflects that.

The group's shares are down a whopping 64.31% since the start of January to just $0.96 per share. The Elixinol market cap has fallen to $133.07 million on the back of this year's slump.

However, Elixinol hasn't been the only cannabis stock to be hit hard by softening earnings and investor hesitation.

Creso Pharma Ltd (ASX: CPH) shares fell 30% on Monday to $0.14 per share while THC Global Group Ltd (ASX: THC) shares are down 21.28% this year.

The Cann Global Ltd (ASX: CGB) share price has nearly halved since the start of the year and opened at $0.016 per share this morning.

The post Elixinol share price slumps 6% after sale of Japanese cannabis arm appeared first on The Motley Fool Australia.

So, what's driving the Aussie cannabis group's shares higher in today's trade?

Why this ASX cannabis stock is surging higher today

THC made a big announcement to the ASX this morning regarding its ongoing operations.

The ASX cannabis company reported the start of medicinal cannabis production with the largest bio-floral extraction facility in the Southern Hemisphere now in operation.

This comes after the company was granted a manufacturing license for the plant in early November.

Harvesting has started at its Bundy Facility and THC has the capacity to support over 250,000 Australian patients.

THC is targeting commercial scale supply of Australian-produced medicinal cannabis for domestic use and export by early 2020.

What else did THC report?

THC reported increased CBD product sales in New Zealand in a big plus for the ASX cannabis company.

After selling its entire recent shipment in New Zealand, THC has now reordered more stock. Simplified prescription processes have been a big boost for the company's sales across the ditch.

THC is expecting strong sales once its product is exported into New Zealand next year and investors have been impressed with the potential earnings boost today.

THC also reported $3 million in unaudited trading revenue over 9 months from its Canadian operations. The ASX cannabis company is looking to expand its revenue base to a potential $5 million in 2020.

Foolish takeaway

The THC share price climbed higher after the update as shareholders received the latest update well.

THC shares are trading at $0.42 per share, having edged lower on Monday although it is still a micro-cap stock.

THC has a market capitalisation of just $58 million, which means less liquidity if you do decide to buy in.

The post Why this ASX cannabis stock is surging higher today appeared first on The Motley Fool Australia.

What moved the ASX cannabis stock yesterday?

THC's share price jumped after receiving a manufacture permit for its Southport Manufacturing Facility Monday morning. The ASX cannabis company is now able to accept medicinal cannabis plant material from any Australian licensed and permitted cultivator. This include THC's own cultivation facilities, which allows it to commence production of Australian medicinal cannabis medicines.

The Aussie cannabis company said it now has the largest extraction capacity for medicinal cannabis in the country. THC's Southport Facility is the largest pharmaceutical bio-floral extraction facility in the Southern Hemisphere.

The ASX cannabis stock surged 13.70% higher to $0.42 per share after making the next big step in the lucrative market. THC has the capacity to support a minimum of 250,000 Australian patients with excess capacity for the global export market.

Packaged and bulk medicinal cannabis can be produced from the Southport Facility with product validation expected to begin shortly and be completed in December.

How has the THC share price performed in 2019?

It's been a difficult year for ASX cannabis stocks and THC has been no exception. The THC share price is down 10.64% even with yesterday's jump in the company's shares.

THC shares fell to a 52-week low last week as competition intensifies and earnings remain low. Fellow Aussie cannabis stock Cann Global Ltd (ASX: CGB) is also down 33% to $0.020 since relisting on 23 August. 

One factor working against the cannabis stocks is small market capitalisation (generally under the $100 million mark). This makes these stocks hugely susceptible to movements in the market given the speculative nature of these investments.

However, the ASX cannabis stocks climbed higher yesterday morning for several reasons, which could be a boost for shareholders.

The post Why this ASX cannabis stock rocketed 13% higher yesterday appeared first on The Motley Fool Australia.

A large number of announcements have been made by Australian pot stocks today. Here's a summary of what's happening:

The BOD Australia Ltd (ASX: BDA) share price is up over 6% to 33.5 cents on the day of its annual general meeting. Ahead of the event, the cannabis centric healthcare company released a presentation which appears to have caught the eye of investors. That presentation reminded investors that the innovation arm of Health & Happiness Group acquired a 17.64% stake in Bod Australia through a $5.5 million investment at $0.37 per share in July. Health & Happiness Group is the company behind the Swisse brand.

The Cann Global Ltd (ASX: CGB) share price is up 5% to 2.1 cents this morning. This follows the release of a product launch update. According to the release, Cann Global has launched its new and nutritious Black Label Hemp Seed Oil and Hemp Seed mixes product range. It also provided an update on its Costco deal. Its VitaHemp Premium Hemp Seed Oil capsules are now available for purchase from Costco's Australian stores after meeting stringent standards.

The Medlab Clinical Ltd (ASX: MDC) share price is up over 7% to 36.5 cents following the release of its October update. According to the release, Medlab achieved a record month in cannabis revenue with 846 bottles dispensed. The company's lead pain drug candidate programme "has seen unprecedented increases in demand."

The THC Global Group Ltd (ASX: THC) share price is up over 8% to 39.5 cents after providing an update on its Southport manufacturing facility. According to the release, THC has been granted a Manufacture Permit from the Australian Office of Drug Control for the facility. This allows the company to accept medicinal cannabis plant material from any Australian licenced and permitted cultivator. Furthermore, it can now commence production of Australian medicinal cannabis medicines. It believes it has the capacity to support a minimum of 250,000 Australian patients in addition to having excess capacity for the global export market.

The post Why THC Global and these ASX cannabis shares are rocketing higher today appeared first on The Motley Fool Australia.

Investors betting on the many cannabis shares listed on the local share market were nursing sizeable declines last month.

Here's what happened:

The Althea Group Holdings Ltd (ASX: AGH) share price was crushed in October, falling a massive 48% over the period. Although the company reported strong growth in prescription numbers, its quarterly revenue was extremely underwhelming at just $755,385. But perhaps the biggest weight on its shares was news that major shareholder and strategic partner, Alphria, was dumping 37 million non-escrowed shares at a significant discount at the time.

The AusCann Group Holdings Ltd (ASX: AC8) share price lost almost 18% of its value last month. As with Althea, investors were quick to hit the sell button after a major shareholder sold its holding. Strategic partner, Canopy Growth Corp, dumped its entire 13.2% stake at a significant discount.

The Creso Pharma Ltd (ASX: CPH) share price crashed 43% lower last month. Investors have been selling this cannabis company's shares due to a collapse in the share price of Canada-listed PharmaCielo. The reason for this is that PharmaCielo is in the process of taking over Creso Pharma in an all-scrip deal. With the PharmaCielo share price almost halving in value in October, the value of its takeover offer has dwindled. Shareholders will be voting on the takeover on November 11.

The THC Global Group Ltd (ASX: THC) share price sank almost 14% lower during October. This decline appears to be down to concerns over the oversupply of dried cannabis flower. THC Global is currently constructing a facility that will produce an initial 80,000kg of dried cannabis flower annually. Given how dried flower inventories in Canada in July were a whopping 25x greater than the monthly sales in the country, the market doesn't really need this extra supply.

The post Why these ASX cannabis shares were crushed in October appeared first on The Motley Fool Australia.