The Zelira Therapeutics Ltd (ASX: ZLD) share price exploded in value today. This ASX healthcare share closed at 94 cents yesterday. But today's session saw the company skyrocket to close at $3.05 a share. That's an eye-watering gain of 224.5%.

Yes, you read that right. Someone with $10,000 worth of Zelira shares yesterday now has more than $30,000 worth today.

So what on earth is going on here that has prompted such a massive change in fortunes for this ASX healthcare share and its investors?

Why did ASX healthcare share Zelira rocket by 220% today?

Well, investors can likely thank a big announcement from the company this morning.

It revealed some very positive results from Zelira's cannabis-based ZLT-L-007 drug. The company has just completed a major clinical trial of ZLT-L-007 and its ability to successfully treat nerve pain.

The results of the trial revealed that ZLT-L-007 achieved significant reductions in pain scores and symptom severity against those delivered by the Pfizer-owned rival drug Lyrica. Zelira points out that Lyrica is a "multi-billion-dollar annual revenue drug".

ZLT-L-007 was also found to "be safe and well tolerated, meeting the primary endpoint for safety with no serious adverse events".

These results have prompted Zelira to "evaluate the further progression of ZLT-L-007 into formal FDA [US Food & Drug Administration] clinical trials".

Here's some of what Zelira's chair Osagie Imasogie said on this exciting news for the company:

As a commercially available pain medicine, Lyrica served as a reliable benchmark to gauge the pain relief efficacy offered by our novel candidate, ZLT-L-007. In addition, Lyrica has historically achieved peak year annual sales of approximately US$5 billion, clearly indicating the market potential for Zelira's pain relief medication that outperformed the level of pain relief from Lyrica. In certain instances, provided up to four times the observed pain relief when compared to Lyrica.

This compelling outcome gives us confidence to evaluate the further progression of ZLT-L-007 into formal FDA clinical trials.

So a very happy day for ASX healthcare share Zelira and its investors. It will be interesting to see where the company goes from here.

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At the time of writing, the Zelira share price is $3.06.

For comparison, the broader market is also in the green today. The All Ordinaries Index (ASX: XAO) has lifted 0.5% while the S&P/ASX 200 Index (ASX: XJO) is up 0.4%. Though, they've traded relatively flat so far this week.

So, what's been driving the Zelira share price higher? Let's take a look.

What's going on with the Zelira share price?

The Zelira share price is rocketing higher once more on Thursday despite no news having been released from the company.

However, it marks the continuation of a notable green run for the stock, seemingly spurred by a German regulatory win.

The company's cannabinoid-based medicine Zenivol was granted the tick of approval from the European nation's drugs and medical devices regulator earlier this week.

The win will see Zenivol – designed as a treatment for insomnia – available outside of Australia for the first time.

The company released the news yesterday following a short trading halt as it prepared the announcement.

However, some in the market appeared to learn of the approval sooner than expected, prompting the ASX to issue a 'please explain' to the company.

Zelira managing director Dr Oludare Odumosu said the regulatory approval marked "a major milestone" for the company.

It will now work with its partner Adjupharm to launch Zenivol in Germany and will keep working to licence the medicine in other global markets.

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This ASX medicinal cannabis share has risen 49% since market close on 11 July from $1.54 to the current price of $2.30. Since 6 July, the company's share price has more than doubled.

Zelira is a biopharmaceutical company developing and commercialising clinically validated cannabis medicines.

So what's going on?

What is happening at Zelira?

Investors appear to have reacted to positive news from the company. Today, the company reported it has achieved a major milestone.

Zelira has received German federal regulatory approval for its leading cannabinoid-based medicine, Zenivol.

The company's shares were placed in a trading halt yesterday pending the release of this news.

Zenivol is used to treat patients with chronic insomnia.

Now, Zelira will be able to market the product in Germany, said to be Europe's largest market for this type of medicine and one of the biggest in the world.

In September 2021, Zelira revealed it had entered an agreement with Adjupharm to commercialise Zenivol.

Commenting on today's news, Zelira managing director Dr Oludare Odumosu said:

The formal approval of Zenivol by BfArM in Germany marks a major milestone for our business.

Germany is one of the largest global markets for cannabinoid-based medicines, and also one of the highest quality global regulatory markets for pharmaceuticals.

We look forward to working with our Partner, Adjupharm in launching Zenivol® in Germany and supporting patients and physicians in treating chronic insomnia in a safe and effective
manner.

Share price snapshot

ASX medicinal cannabis share Zelira has lost nearly 74% in the past year and 60% in the year to date. However, in the past week Zelira shares have jumped 130%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has lost nearly 10% in a year.

Zelira has a market capitalisation of about $22 million based on the current share price.

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It followed the company's request that its shares be placed in an immediate trading halt.

Shares in the medicinal cannabis company were frozen at $1.98 apiece.

Why is the Zelira share price halted?

In a statement to the ASX, Zelira advised it is preparing to make an important announcement to investors.

This is in relation to the receipt of results from Germany's health regulator, BfArM.

Zelira requested the trading halt remain in place until Thursday 14 July or when the announcement is made, whichever comes first.

A brief rundown on Zelira

Founded in 2003, Zelira is a biopharmaceutical company focused on researching, developing, and commercialising clinically-validated cannabinoid medicines.

The company has a pipeline of cannabinoid-based medicines undergoing clinical development that are waiting for access to the German market.

This includes two products that Zelira launched in 2020, both of which are available in Australia.

The first is its HOPE product which aims to improve the health of people with autism spectrum disorder.

And the other product is Zenivol which helps people with chronic sleep disorder (insomnia).

Zelira share price snapshot

Despite today's euphoric gains, Zelira shares have lost almost 80% since this time last year.

When looking at year-to-date, the company's shares are down around 65%.

Notably, Zelira shares hit a multi-year low of 90 cents apiece last month before storming higher.

Based on valuation grounds, the company presides a market capitalisation of roughly $18.9 million.

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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.

At the time of writing, the cannabis company's shares are swapping hands for 5.7 cents, up 7.55%.

What did Zelira announce?

Investors appear upbeat by the company's latest announcement, sending the Zelira share price higher.

According to this morning's release, Zelira advised its HOPE products have launched in Washington DC. Additionally, Zelira noted that this occurred through its partnership with Alternative Solutions. 

Alternative Solutions is a licenced grower, manufacturer, and distributor of medical cannabis products. The company operates in the District of Columbia (Washington DC), United States.

Furthermore, both companies entered into an exclusive licence agreement in late 2020 to expand the market presence for Zelira's range of HOPE products.

Currently, Washington DC has an agreement with 32 other states within the country for approved medical cannabis programs. The mutual exchange allows patients who are registered in the authorised states to legally buy medical cannabis in Washington DC.

Zelira stated that HOPE is available at the National Holistic Healing Centre, located near Dupont Circle.

As part of the deal, Zelira will receive an upfront fee and ongoing royalties from product sales within Washington DC. The company did not provide any further details regarding the financial aspects of the contract.

In addition, Zelira holds a licencing agreement with Ilera Healthcare LLC and Advanced Biomedics LLC for Pennsylvania and Louisiana, respectively. Management believes that customer adoption and sales will be similar in Washington DC and other markets.

Management commentary

Zelira managing director, Dr Oludare Odumosu hailed the company's success, saying:

The successful launch of HOPE in Washington DC is a huge step forward in Zelira's strategic focus on expanding access to HOPE throughout the USA. We look forward to partnering with Alternative Solutions to support the growth of our product in these new markets.

Alternative Solutions CEO, Matt Lawson-Baker further commented:

We are thrilled to partner with Zelira in bringing HOPE to Washington DC and look forward to bringing patients scientifically formulated medicines they can trust.

Zelira share price snapshot

Since the beginning of 2021, investors have seen the Zelira share price continue to fall in value. Year-to-date performance stands at a loss of more than 40%, reflecting weak shareholder sentiment.

Based on current valuations, Zelira presides a market capitalisation of around $63 million, with close to 1.2 billion shares outstanding.

The post Why the Zelira (ASX:ZLD) share price is storming 7% higher appeared first on The Motley Fool Australia.

At the time of writing, the cannabis company's shares are fetching for 5.9 cents, down 1.67%.

Q3 FY21 quarterly update

Investors appear unfazed by the company's latest snapshot, sending Zelira shares slightly in the negative.

According to its release, Zelira delivered a robust performance for the quarter ending 31 March 2021.

Cash receipts including product sales and licensing payment rose to a record $225,000, reflecting a 249% increase on H1 FY21. The strong growth predominately came from the company's United States launch of its SprinjeneCBD oral care product in December.

Zelira noted that it's planning a suite of new products to be rolled out over the next two quarters. It is expected that this will further amplify growth in sales and create additional revenue streams.

Zelira managing director, Dr Oludare Odumosu hailed the robust result, saying:

The March quarter performance is the strongest quarterly cash receipts reported for Zelira Therapeutics since its inception and clearly demonstrates the start of the Company's revenue ramp up.

Our long-term focus to develop a portfolio of clinically validated and scientifically formulated cannabinoid medicine and consumer products is starting to bear fruit as commercialisation ramps up. We are well placed to build on the March quarter's momentum and accelerate our progress in 2021 as we launch new products and expand into new geographies.

Zelira appointment

Complimenting the result, Zelira highlighted its February address of being appointed to the National Cannabis Roundtable (NCR) board of directors in Washington DC, United States.

Founded in late 2010, the NCR is a trade association focusing on federal cannabis reform in the United States. The group consists of innovators, investors and employers across the entire chain of legal cannabis businesses.

NCR is seeking to decriminalise cannabis at the federal level, ensuring patients and customers have access to state-based cannabis programs.

Zelira appointed Dr Odumosu to represent the company on the NCR board.

CEO of Trulieve and second vice chair of NCR's board of directors, Kim Rivers commented:

We are excited to have Zelira join our growing Roundtable. Their focus on research and health is ground-breaking and will help us showcase the breadth and potential of the cannabis industry as we seek to further reform and grow the legal cannabis industry in the US.

Dr. Odumosu added:

The manner that the federal government handles reform will have fundamental impacts on the people we serve. Zelira is committed to bringing break-through therapeutics to market and we need to have a regulatory framework in place that will allow research to expand and grow on a Federal/National level.

Outlook

Looking ahead, Zelira plans on growing revenues from the multiple products it has across its Australian and United States portfolio. It noted that it is currently progressing licencing discussions for its Hope and Zenivol products in the United States. In addition, negotiations are set to resume in expanding distribution to other markets, particularly Germany and the United Kingdom.

Zelira share price snapshot

Zelira shares have gained around 40% over the past year, but are down 35% since the start of 2021.

Based on the current share price, Zelira has a market capitalisation of roughly $70 million, with 1.19 billion shares outstanding.

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As reported by the ABC, the private medicinal cannabis company Elite Cannabinoids has received approval for growing a range of different cannabis strains at a secluded location 800km north of Perth.

High-level details for Elite Cannabinoids

Elite Cannabinoids recently gained its license for growing medicinal cannabis. The company will now be able to utilise 46 hectares of land in the production of cannabis. Additionally, the company expects to have an onsite pharmaceutical manufacturing facility. The combined enterprise should generate more than 60 jobs for the Gascoyne region.

In the words of Elite Cannabinoids CEO Sebastian Cox, "It will be one of the biggest medicinal cannabis facilities in the southern hemisphere."

Mr Cox further explained that the Gascoyne region was exceptional for the operation due to the high solar exposure, low biosecurity risks, and good water security.

The facility will be positioned to accommodate the demand of patients throughout Australia, with the added potential of expanding to international markets. As such, the company will begin with 253,000 cannabis plants in the first stage of operations. Production is anticipated to be in the works by 2023.

What does this mean for ASX cannabis shares?

Any correlation between Elite Cannabinoids approval and other companies is speculation. However, it does indicate there is still an existing demand for medical uses of cannabis. As mentioned in the ABC report, the Australian Institute of Health and Welfare estimates 600,000 Australians currently use it for medical purposes.

Australia legalised production and cultivation in 2016, which invoked pot stock mania in 2017. Since then, the sector has been rather quiet, with many shares falling back to reality. The big potential yet to be unlocked is legalisation for recreational use in Australia.

A few ASX-list players in the game include Ecofibre Ltd (ASX: EOF), Cann Group Ltd (ASX: CAN), Zelira Therapeutics Ltd (ASX: ZLD), and Althea Group Holdings Ltd (ASX: AGH).

Notably, the best performers in the last year have been Zelira and Althea. Shareholders would be happy with appreciations of 38% and 47% respectively. In contrast, the others have experienced falls of 40% or more. Internationally it is a very competitive landscape for these companies, but the market is still budding.

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CBD, which occurs naturally in marijuana plants, can help relieve pain, anxiety, insomnia and reduce cancer-related symptoms and side effects. Unlike THC, which is the main psychoactive cannabinoid found in marijuana, CBD does not make users 'high'. 

The TGA's decision means adults will be able to purchase a maximum daily dose of 150mg of CBD over-the-counter in oral and sublingual formulations. CBD topical creams and vaping products will continue to require a doctor's prescription.

What does this mean for ASX cannabis shares?

The change is a positive development for ASX cannabis shares, which have been lobbying for easier access to medical marijuana products. But don't rush out to your nearest pharmacy just yet — no specific CBD products have been approved for sale so far. 

Australian cannabis companies are working hard to get products approved for sale, and sales of CBD products are expected to boom over the coming months as products come to market. This will create a significant opportunity for ASX cannabis shares. We take a look at how some of the largest ASX cannabis shares are performing in light of this development. 

Althea Group Holdings Ltd (ASX: AGH) 

Althea is a producer, supplier, and exporter of pharmaceutical-grade medicinal cannabis products. Currently operating in Australia, the United Kingdom, and Germany, the company has plans to expand into emerging markets throughout Asia and Europe. The Althea share price has been on the rise since the TGA's decision was announced in December, gaining 23% from a low of 42 cents. Shares in Althea are currently trading at 52 cents apiece. 

Althea has welcomed the TGA's decision and is exploring registration options for current and future products. Even before the decision, Althea was performing strongly. In the company's December quarter, Australian revenues increased 29% (compared to the September quarter), and UK revenues grew 90% month on month in December. 

Germany's health department granted all necessary licences for the sale and distribution of Althea products in Germany late last year. An initial shipment of products is en route to the country. Althea also operates a manufacturing plant in Canada, which entered an agreement to manufacture three cannabis-infused beverages during the December quarter.

Expansion into South Africa is on the cards, with a wholesale supply agreement signed under which Althea-branded products will be imported for sale and distribution in the country. The first shipment of products under the agreement is expected to be delivered in the second quarter of 2021. This represents a significant opportunity for Althea, with the South African legal medicinal cannabis industry expected to be worth US$667 million by 2023. 

Auscann Group Holdings Limited (ASX: AC8) 

Auscann has a pipeline of proprietary cannabinoid-based pharmaceutical products in development and has voiced its support for the TGA decision to make cannabinoid products available over the counter. The decision means a number of Auscann's CBD products in development have the potential to be registered as pharmacy-only medicines.

CEO Nick Woolf has said, "the TGA decision is a positive outcome for the industry. We are well advanced in developing compliant CBD-only products that could be registered as over-the-counter medicines." 

Auscann is in the process of acquiring Cannpal Animal Therapeutics Ltd (ASX: CP1), a move that will add breadth and depth to the product line.

In the December quarter, Auscann completed a restructuring program to reduce cash burn, with expenditure focused on value-adding R&D. Utilising its state-of-the-art medicinal cannabis facility in Western Australia, Auscann is advancing the development of a hard-shell capsule product containing up to 150mg of CBD. This CBD-only product candidate is being formulated for approval as a pharmacy-only medicine.

Auscann's share price has also risen off the back of the TGA decision, gaining 28% since 1 December 2020. Auscann shares are currently trading at 18 cents a share. 

Zelira Therapeutics Limited (ASX: ZLD)

Zelira is a therapeutic medicinal cannabis company with a portfolio of proprietary revenue-generating products and a pipeline of products undergoing clinical development.

In the December quarter, Zelira launched its HOPE products in Australia, which are targeted at patients with autism. Available through the TGA's special access scheme, the products are now working their way via authorised prescribers into the market. A new licencing deal was also announced to distribute HOPE products in Washington DC late last year. Washington has reciprocity arrangements in place with 32 other US states, meaning patients in these states will be able to legally purchase HOPE products at an approved Washington dispensary. 

Zelira announced the launch of its proprietary CBD toothpaste in December, which will be distributed in the USA through retail stores such as Bed Bath & Beyond and e-commerce platforms such as Amazon. Discussions regarding distribution in networks outside the US are ongoing.

Sales of Zelira's products have been in line with forecasts, although they were impacted by COVID lockdowns. Increasing sales are forecast as the company builds market awareness of its products and market conditions improve thanks to the roll-out of the COVID vaccine internationally.

Zelira's share price spiked late last year following the TGA's announcement but has since fallen back to levels seen in November 2020, with shares currently trading at 7.6 cents. 

What's next for the medical marijuana industry? 

The availability of CBD products over the counter is a step towards increasing social acceptance and reducing the stigma often associated with medical marijuana products.

CBD products are expected to start to become available in the coming months – each product that goes on sale requires individual approval by the TGA. The market is expected to be competitive, with early entrants potentially benefiting from a first-mover advantage.

For ASX cannabis shares, the race is on to make a mark in the over-the-counter CBD space. 

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Consumer research firm IBISWorld revealed Tuesday that the medical cannabis manufacturing industry is currently experiencing a boom despite the still-remaining legal hurdles.

"The strict regulatory framework regarding the manufacture of medical cannabis products has limited the sector's growth over the past five years," said IBISWorld senior industry analyst Will Chapman.

"However, the recent determination by the Therapeutic Goods Administration to allow over-the-counter [cannabidiol] products to be sold without a prescription is expected to drive significant revenue growth in the years ahead."

The industry produces medicines and consumables based on one of two ingredients extracted from the cannabis plant: cannabidiol (CBD) and tetrahydrocannabinol (THC).

CBD is a non-psychoactive ingredient used as a pain killer and an anti-convulsant. THC is the stuff that gives you "a high" but can be used to treat pain and nausea, low appetite and insomnia.

Recreational use for cannabis has been legalised in Canada and some US states. There is no sign of such a development yet in Australia, but IBISWorld reckons this won't stop local cannabis businesses from growth.

"It will take time for new medical cannabis products to be approved, but medicines derived from cannabis will eventually appear on pharmacy shelves," said Chapman.

Banks are offering massive finance to cannabis companies

The sector in Australia is still very much in the startup phase – so it's coming off a low base. 

Nevertheless, after seeing total revenue of just $5.4 million in the 2020 financial year, IBISWorld has forecast the current year will end with $31.2 million.

But there's still plenty of growth to come, it reported.

"Overall, medical cannabis manufacturing revenue is projected to rise at an annualised 79.1% over the five years through 2025-26, to $575.2 million," said Chapman.

"IBISWorld anticipates employment in this industry to reach 1,500 by 2025-26."

There are a few cannabis businesses listed on the ASX.

The Motley Fool reported last month Zelira Therapeutics Ltd (ASX: ZLD) had a stunning 2020, with the share price spiking up 67%. Althea Group Holdings Ltd (ASX: AGH) returned a nice 14% to its investors over the calendar year.

IBISWorld singled out Cann Group Ltd (ASX: CAN) as a "major player" in the Australian industry, with a 24% market share in the 2020 financial year.

Privately owned Little Green Pharma was also named by the analysis firm as a player to watch.

Banks have already recognised the huge potential, according to Chapman, lending out large sums to cannabis startups.

"The growth opportunities in the budding cannabis industry have not gone unnoticed by Australian financiers. In March 2020, start-up CannaPacific secured a $3.5 million debt facility from Westpac Banking Corp (ASX: WBC). Cann Group secured a $50 million credit facility from National Australia Bank Ltd (ASX: NAB) in November 2020," he said.

The ultimate milestone

Recreational legalisation may remain politically unpalatable in the near future in Australia. But the local industry's current focus is to get a cannabis-based medicine on the Australian register of Therapeutic Goods for domestic supply.

There is currently none on that hallowed list.

"For many start-up cannabis businesses, the ultimate goal is to have the medical benefits of cannabis recognised and their products accepted among medical professionals," Chapman said.

"Achieving the listing of cannabis products on the Pharmaceutical Benefits Scheme would be a major win for cannabis products."

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But the Australian medical marijuana industry is building momentum, continuing its growth trajectory in 2020 despite the impacts of COVID-19. According to Freshleaf analytics, the market tripled in size over 2020 with 30,000 active patients and $95 million in annual revenue. 

As the industry matures, competition is increasing. The number of available products has doubled in the last year to 150, putting pressure on prices. Prices have trended downward, and are now on par with more mature markets such as Canada. With price decreases, patient doses have increased, while average spend remains static. 

The industry got a boost in September when the TGA down-scheduled cannabidiol (CBD). This will allow Australian patients to purchase CBD products from a pharmacist, without needing a prescription.

But in New Zealand, voters were against a proposal for greater legalisation and decriminalisation of recreational cannabis floated in October, albeit by a narrow margin. This will be a blow to the industry which may have hoped for a potential widening in customer base.

In more positive news, the UN voted to remove cannabis and cannabis-related substances from Schedule IV of the international treaty governing narcotic drugs in early December. 

ASX cannabis shares saw mixed results over 2020. While some outperformed the broader market, others lagged. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up around 1% over the year.

Let's take a look at how 5 of the best ASX cannabis shares have performed in 2020.

1. Zelira Therapeutics

Small cap Zelira outperformed following its merger with US-based medicinal cannabis product developer Ilera in late 2019. The merger provided Zelira with direct access to the US market where revenue is being generated by the recently launched HOPE brand of cannabis formulations. Zelira entered into a licensing agreement in December to allow for distribution in the Washington DC market. 

Zelira has previously licenced HOPE in Pennsylvania and Louisiana and remains focused on expanding distribution across approved markets in the US. With its sights firmly set on becoming a profit generating pharma company, Zelira completed a $4.58 million capital raise earlier this year to fund the launch of multiple products into global markets. 

2. Althea Group 

Althea had a bumper year of share price growth compared to some pot sticks. The company is in the product distribution game, connecting patients and prescribers via its Althea Concierge app.

Active in Australia and the UK, and Althea recently started distributing to Germany. The company has also entered the manufacturing sector with its Peak Processing Solutions facility in Canada, which is capable of processing cannabis infused edibles and nutraceuticals. 

In December, Althea reported 11,841 Australian patients, up from 3688 a year earlier.  The aim is to have 30,000 patients by 2021. With 810 healthcare professionals prescribing Althea products in Australia, revenue is growing – it was up 48% month-on-month in November to $110,378. This has been reflected in an increase in the Althea share price over 2020. 

3. Cann Group

The Cann Group share price, on the other hand, is finishing 2020 largely flat. A July capital raise was conducted at a 50% discount to the (then) share price of 82 cents, causing the price to plummet. Key stakeholder Aurora Cannabis then sold its 11.84% shareholding in the company in October in off-market trades to undisclosed buyers. 

In more positive news, the company finally executed debt documentation in December. This will provide funding of $50 million to complete construction of the first stage of the company's production site near Mildura.

A staged approach to construction of the facility was adopted in response to the global oversupply of cannabis late last year. Cann Group is choosing to initially focus on meeting Australian domestic demand while reducing operating expenses as it seeks to transition to profitability. 

4. Ecofibre

Ecofibre saw its share price decline over the full year as investors shied away from the hemp products producer. The company listed on the ASX in March 2019 at $1 per share and was trading above $3 in late 2019.

The share price has since, however, retraced its steps. Ecofibre's US based Ananda Health business has been significantly impacted by COVID-19, lawlessness in key US markets, and industry changes in the US CBD market. Revenue for the first quarter of 2021 was significantly down on the prior corresponding period. Ecofibre has advised the best it can expect is a breakeven profit result in FY21. 

5. Auscann Group

The Auscann share price spent most of 2020 in the mid teens but spiked in early December following the UN's vote on cannabis. Auscann's CEO commented, "the change in scheduling has the potential to vitalise research into medicinal cannabis, removing some of the deterrents to activity in this space."

Nonetheless the share price remains well down from all time highs. The company launched its hard shell capsules in 2020 and says sales have initially been slower than hoped but are building. From a low base, sales are currently increasing 50% month on month. 

The Australian medical marijuana industry has undergone a reckoning with reality over the last couple of years. This has resulted in more realistic valuations than in the early, exuberant days post legalisation.

As the sector moves toward maturity, 2021 could mark a turning point in discovering what a healthy medical marijuana industry looks like in Australia.

The post 5 top ASX cannabis shares in 2020 appeared first on The Motley Fool Australia.

Alternative Solutions is a licenced grower, manufacturer and distributor of medical cannabis products in the District of Columbia (Washington DC), United States.

During late morning trade, the Zelira share price hit an all-time high of 14 cents. However, its shares have since pulled back slightly, up 16% to 12 cents at the time of writing. In comparison, the All Ordinaries Index (ASX: XAO) is edging 0.4% higher to 6,911 points.

What did Zelira announce?

According to the release, Zelira advised it has entered an exclusive licencing deal with Alternative Solutions to expand market presence for its HOPE products.

Under the terms of the agreement, Alternative Solutions will manufacture and distribute HOPE products in Washington DC. The expanded medical cannabis market will see sales begin in the second quarter of 2021.

In return, Zelira will receive an upfront fee and ongoing royalties from product sales within Washington DC. The company did not provide any further details regarding the financial aspects of the contract.

Currently, Washington DC has an agreement with 32 other states within the country for approved medical cannabis programs. The mutual exchange allows patients who are registered in the authorised states to legally buy medical cannabis in Washington DC.

In addition, Zelira holds a licencing agreement with Ilera Healthcare LLC and Advanced Biomedics LLC for Pennsylvania, and Louisiana, respectively.

Management commentary

Zelira managing director and CEO Dr Oludare Odumosu commented on the licencing agreement:

Our partnership with Alternative Solution, a leader in the Washington DC market, is a strategic move in line with our mission of working with market leaders in approved markets to expand access to HOPE across the USA. We are particularly excited about this partnership because Washington DC is a gateway state with over 24 million visitors passing though the US capital in a year. Washington DC's reciprocity is a strategic move that allows approved patients from 32 states to legally access HOPE in DC.

Alternative Solutions CEO Mr Matt Lawson-Baker added:

Alternative Solutions is thrilled to be partnering with Zelira to bring the HOPE product line to the Washington DC medical cannabis market. Providing access to this medicine in the Nation's capital will give many families and patients the treatment they deserve through a legal regulated medical cannabis program.

About the Zelira share price

The Zelira share price has performed strongly over the year, gaining more than 500% for patient shareholders. At the time of writing, Zelira shares are up by 16.16%, giving the company a market capitalisation of $117 million.

The post Here's why the Zelira (ASX:ZLD) share price just rocketed to a new high 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.

Its shares were up as much as 7.5% to 8.6 cents in morning trade before dropping back a touch.

What did Zelda announce?

This morning Zelda announced a proposed merger of equals with Ilera Therapeutics.

Ilera Therapeutics is a privately held medicinal cannabis and cannabinoid science company based in the United States. It was recently spun-out of Ilera Healthcare, which is a company Zelda had previously entered into a strategic partnership with.

The release advises that its operations are centred in the US states of Pennsylvania and Louisiana, while its clinical networks and distribution channels span across North America.

Subject to approval from Zelda shareholders, and all conditions of the sale being met, Zelda is proposing to acquire 100% of Ilera Therapeutics through an all-scrip transaction.

The total consideration comprises 838,841,934 fully paid ordinary shares, which equates to approximately 50% of total diluted issued capital in Zelda. This includes 113,601,290 fully paid ordinary shares, with the remainder subject to performance milestones being achieved. Based on today's share price this deal is worth ~$72 million to Ilera Therapeutics.

What is the rationale for the merger?

Management explained that the merger between Zelda and Ilera Therapeutics will create a global medicinal cannabis company, which it plans to name Zelira Therapeutics.

It notes that the merger will bring together a portfolio of revenue generating medicines and products undergoing clinical development that are expected to enter the market from 2020. Some of these products are targeting large addressable markets such as pain, sleep, and anxiety.

Zelda's chairman, Harry Karelis, believes the merger will be transformational for both companies.

He said: "This is a transformational opportunity for both companies. The merger will create one of the world's leading medicinal cannabis companies with a rich pipeline of clinically validated products under development and unique access to the world's largest and fastest growing cannabis markets."

"As markets for medicinal cannabis become increasingly regulated, our strategy of undertaking robust clinical trials to validate and differentiate our products is recognised as being at the forefront in this sector. The merger will enable the combined company to accelerate plans to disrupt the medicinal cannabis and pharmaceutical markets globally," he added.

Overall, I think this is a good move by Zelda. However, it is too soon for an investment in Zelda or rivals Althea Group Holdings Ltd (ASX: AGH) and Cann Group Ltd (ASX: CAN) for me. Until a leader in the industry emerges and start generating meaningful revenues, I plan to sit on the sidelines.

The post Why this ASX cannabis share jumped 7.5% higher today appeared first on The Motley Fool Australia.

Momentum was building, media pundits were talking about the prospect of a new multibillion dollar global pot industry, and even Australian investors were starting to get excited, pumping up the value of Australian marijuana stocks like Auscann Group Holdings Ltd (ASX: AC8) and Cann Group Ltd (ASX: CAN). Everyone was being swept up in a new green wave!

But flash forward about 18 months and the wind has well and truly gone out of the cannabis industry's sails – and not just here in Australia. The big US and Canadian weed companies like Canopy Growth Corp, Aurora Cannabis Inc, and Cronos Group Inc are all well and truly in the red over the last six months.

The main Australian players, Auscann and Cann Group, both hit new 52-week lows in March of this year. And despite making up some slight ground since then, shares in both companies have been trading more or less sideways, with neither able to really break out of their current rut.

It all just goes to show to what degree investors have lost interest in pot stocks. It's probably got a great deal to do with market saturation – in 2018 it seemed like a new cannabis company was popping up on the ASX every week.

In addition to Auscann and Cann Group, there was all manner of medicinal cannabis and pharmaceutical companies fighting for a share of the market's attention. Think Creso Pharma Limited (ASX: CPH), Thc Global Group Ltd (ASX: THC), MMJ Group Holdings Ltd (ASX: MMJ), MGC Pharmaceuticals Ltd (ASX: MXC), Zelda Therapeutics Ltd (ASX: ZLD), Botanix Pharmaceuticals Ltd (ASX: BOT), and Elixinol Global Ltd (ASX: EXL). And that's not even an exhaustive list!

So is there a silver lining?

The global march towards cannabis legalisation does seem to be progressing, even if it's not top of the list for our local legislators. Luxembourg recently announced its plans to become the first European country to legalise recreational weed consumption, and it is urging its neighbours in the EU to follow suit.

According to a recent article in the Los Angeles Times, licensed cannabis sales in California in 2019 are expected to hit US$3.1 billion, making it the largest legal marijuana market in the world. This is also a big increase over the US$2.5 billion in sales generated in the state in 2018. The same article states that Canadians are predicted to spend US$1.1 billion on legal cannabis this year.

The point is, the market for cannabis exists and it is definitely growing, and growing fast. The legal market for marijuana in California alone is expected to more than double to US$7.2 billion by 2024. And yet local and international pot stocks continue to flat line.

Recent developments with Creso Pharma shows what might need to happen to enliven the sector again. The Creso share price surged almost 31% higher in a single day earlier this year when it was announced that it would be acquired by Canadian cannabis company PharmaCielo Limited.

With so many small niche companies currently in operation, the sector definitely feels crowded and in desperate need of some more M&A activity. This is particularly true in Australia, where full legalisation still seems a long way away. Given this environment, it's not unreasonable for an investor to question how the industry can support so many local cannabis companies, particularly over the short term.

Foolish takeaway

My personal opinion is still that this is an industry with a lot of global growth potential ahead of it, although it has demonstrated itself to be particularly risky recently. I still think if you pick your stocks wisely, have a great deal of patience, and maybe get your healthy dose of luck, you could still end up profiting a great deal from cannabis stocks – but you definitely need to have a long-term focus and a big appetite for risk.

The post Should you still be invested in ASX marijuana shares? appeared first on The Motley Fool Australia.

But one area of the market which has avoided the sell off and started the year on a high is the cannabis sector.

A number of cannabis-focused companies have pushed significantly higher on Wednesday. Here's the current state of play:

The Auscann Group Holdings Ltd (ASX: AC8) share price is almost 8% higher at 62 cents despite there being no news out of it. Just before Christmas AusCann announced that executive director Dr Paul MacLeman will act as interim CEO from January 1 until a full-time appointment is made by the board.

The Creso Pharma Ltd (ASX: CPH) share price has stormed 15% higher to 56.5 cents after Israel's Parliament approved a law for exporting medicinal cannabis and a new regulatory structure to approve foreign ownership of Israeli medicinal cannabis operations. Management believes Creso is well positioned to take advantage of these changes via its 74% stake in a joint venture with Israeli-based Cohen Propagation Nurseries.

The MGC Pharmaceuticals Ltd (ASX: MXC) share price has climbed 5% to 4.2 cents. MGC Pharmaceuticals is another company that could benefit from the law changes in Israel. The founders of the European-based specialist medical cannabis company are all prominent figures in the Israeli medical cannabis industry.

The MMJ Group Holdings Ltd (ASX: MMJ) share price has pushed 6% higher to 25 cents. MMJ also has exposure to the Israel market through its 100% stake in an Israeli cannabis R&D company Phytotech Therapeutics.

The Zelda Therapeutics Ltd (ASX: ZLD) share price has stormed 13.5% higher to 5.9 cents despite there being no news out of it. Despite this gain, its shares are down around 60% since this time last year.

One company that has missed out on today's gains is Cann Group Ltd (ASX: CAN). The Cann share price is down 2% in afternoon trade despite the positive investor sentiment in the industry and news that an insider was buying shares last week.

The post ASX cannabis shares have started the year on a high appeared first on The Motley Fool Australia.

Three small cap shares on the up on Tuesday are listed below. Here's why they are higher:

The Bubs Australia Ltd (ASX: BUB) share price has given back some of its early gains and is now up just 1.5% to 68 cents. Investors appear to have responded positively to news that its current CEO Nicholas Simms will step down from the role at the end of October. He will be replaced by co-founder and managing director Kristy Carr. According to the release, the appointment of Carr has signalled that the business has entered into the next phase of development. Prior to this news breaking, analysts at Morgans had declared Bubs a hold with a reduced price target of 60 cents. Previously the broker had a price target of 82 cents on the goats milk infant formula company's shares.

The Wattle Health Australia Ltd (ASX: WHA) share price is up 2% to $2.04. This morning the infant formula and baby food company announced that it has extended the 12- month supply agreement with India-based Vasudevan and Sons Exim Private Limited (VSEP) for its natural baby food range. According to the release, VSEP has increased the minimum volumes for the term of the supply agreement representing revenue of approximately A$3.5 million. As part of the supply agreement VSEP will put a bank guarantee in place to guarantee the minimum supply.

The Zelda Therapeutics Ltd (ASX: ZLD) share price is up over 2.5% to 7.9 cents after entering into a distribution and manufacturing strategic partnership with German medicinal cannabis group HAPA Medical. According to the release, the agreement provides HAPA with first rights to distribute and/or manufacture Zelda's clinically validated formulations into the rapidly growing German market. Management advised that no amounts will be received initially under this arrangement and all future receipts will come from the sale and distribution of Zelda's products into the German and European markets.

The post These 3 ASX small caps are pushing higher today appeared first on The Motley Fool Australia.

Canada becomes only the second country in the world to legalise the recreational use of marijuana. By September this year Canadians may be able to buy consume or buy cannabis.

The PM of Canada, Justin Trudeau, said on Twitter "It's been too easy for our kids to get marijuana – and for criminals to reap the profits. Today, we change that. Our plan to legalize & regulate marijuana just passed the Senate. #PromiseKept"

According to some estimates, around US$4.5 billion was spent on cannabis in 2015.

Under the new rules, adults will be allowed to have up to 30g of dried cannabis in public. The government will set out regulations about foods that have cannabis in it.

However, it will still be illegal to have more than 30g, buy from an unlicensed cannabis dealer or be growing more than four cannabis plants for households.

This will generate a lot of tax dollars as well as give individuals more freedom.

There are a number of medicinal cannabis companies that are trading on the ASX which may react positively or negatively to this news. My colleague, James Mickleboro, has already discussed how this might affect AusCann Group Holdings Ltd (ASX: AC8).

I wouldn't be surprised to see excited traders send the share prices of many the medicinal companies higher like Cann Group Ltd (ASX: CAN), MMJ Phytotech Ltd (ASX: MMJ), Creso Pharma Ltd(ASX: CPH), Hydroponics Company Ltd (ASX: THC), Zelda Therapeutics Ltd (ASX: ZLD) and MGC Pharmaceuticals Ltd (ASX: MXC)

Investors may believe that Canada legalising cannabis makes Australia legalising it one step closer.

Foolish takeaway

However, despite the growing excitement surrounding the cannabis industry readers must remember that there is very little revenue and zero profit being generated across the industry.

Many of the above companies have valuations worth tens (or more) of millions of dollars. Right now, using standard valuation methods, they are not worth that. Perhaps in the long-term they will be profitable but that's a long time away.

The post Canada legalises recreational cannabis use appeared first on The Motley Fool Australia.

While this is undoubtedly a solid gain, it is nothing compared to some of the gains being made by small cap shares today.

Three that have caught my eye with stronger than average gains are listed below. Here's why they are on the rise:

The Argosy Minerals Limited (ASX: AGY) share price has rebounded from yesterday's 28% decline with an 9% gain to 23.5 cents. Yesterday the lithium-focused mineral exploration company's shares were sold off after results from testing at its Rincon operation in Argentina revealed that its lithium carbonate (LCE) was industrial grade and not battery grade. However, management has sought to clear things up today with a detailed response to shareholder questions. Importantly, it believes that the sample that was tested will prove to be battery grade once its gas has been connected and the washing process has been completed. There is roughly US$3,000 per tonne difference in the prices of the two grades. I would continue to avoid Argosy until the grade and true value of its asset is known.

The Noni B Limited (ASX: NBL) share price has zoomed 7% higher to a 52-week high of $3.00 despite there being no news out of the retailer. However, a change of substantial holding disclosure from WAM Capital Limited (ASX: WAM) reveals that the listed investment company has been increasing its holding in Noni B. Its stake has now grown to approximately 8.2% from 7.1%. While Noni B is no longer the bargain buy it was 12 months ago, I still see a lot of value in its shares after its recent acquisition and can't say I'm surprised to see WAM Capital increasing its position.

The Zelda Therapeutics Ltd (ASX: ZLD) share price has climbed 4.5% to 11.5 cents after the biotechnology company provided an update on its paediatric brain cancer research project with the Telethon Kids Institute in Perth. Initial results have shown that increasing doses of pure tetrahydrocannabinol (THC) or pure cannabidiol (CBD) reduces cancer cell viability in cell-based assays. Additional studies are planned to further understand the nature of this effect. This is undoubtedly promising news, but there is still a long road ahead and Zelda is unlikely to be generating revenues for some time.

The post Why these small cap shares are on the rise today appeared first on The Motley Fool Australia.

Four shares that have climbed more than most today are listed below. Here's why they have started the week with a bang:

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has risen 5% to $10.39 following the release of a positive broker note out of Goldman Sachs. According to the note, Goldman has upgraded the regional bank's shares from a neutral rating to a buy rating. The broker made the change as it believes Bendigo and Adelaide Bank has strong leverage to recent and future deposit margin improvement and has the most immediate leverage in the sector to a rising cash rate environment.

The Newcrest Mining Limited (ASX: NCM) share price is up 2.5% to $20.50 after the gold miner received approval from the NSW Department of Planning and Environment to use the first 200 metres of the old Cadia Hill open pit as a tailings storage facility. Newcrest is now installing the pipeline infrastructure, with utilisation of the open pit as a storage facility expected to commence in the first week of May.

The Western Areas Ltd (ASX: WSA) share price has pushed a further 3% higher to $3.82. This leading nickel miner's shares have been on fire this month thanks to rising nickel prices. There are concerns that potential U.S. sanctions could hit a leading Russian nickel producer and global supplies hard.

The Zelda Therapeutics Ltd (ASX: ZLD) share price is up 4.5% to 11.5 cents. This morning the cannabis-based biotechnology company advised that recruitment for Australia's first clinical study of medical cannabis to treat insomnia is now complete. The company's study will soon begin, with patients undergoing baseline sleep measurements before commencing pharmaceutical dosing. Results are due out by the end of the year and will be worth watching out for.

The post Why these 4 ASX shares have started the week with a bang appeared first on The Motley Fool Australia.