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Is Cannabis Space Offering a Lucrative Investment Opportunity Amid Coronavirus Outbreak?

The legal cannabis market in Australia is set to boom, and cannabis is turning out to be the one thing that wouldn’t be hampered by seasonality. The country has one of the largest medicinal cannabis markets that is regulated by the federal government. The cannabis industry is one of the most disputed sectors throughout the world, and over the past few months, significant development has been observed in the industry.

In the first few weeks of the COVID-19 pandemic, the government of Australia labelled specific “nonessential” sectors for applying constraints in the operations. However, the medical cannabis industry was not a part of that list suggesting that cannabis manufacturers and suppliers remained open during the lockdowns. Moreover, Australia recently reported the best month for medical cannabis concerning the number of patient approvals.

Furthermore, industry group Medicinal Cannabis Industry Australia (MCIA) also stated that medical cannabis is eligible as an essential service under the public health orders announced by the state as well as the territory government. Hence, the cannabis industry is catching investor’s eye amid the COVDI-19 pandemic.

In the given backdrop, we will highlight five ASX-listed cannabis stocks– AGH, LPG, EXL, BOT, AC8.

Althea Group Holdings Limited (ASX:AGH)

ASX-listed licensed medicinal cannabis player Althea is engaged in the distribution of pharma-grade cannabis for patients with debilitating ailments. The Company currently operates in the cannabis market of the UK, Australia, and Germany, and it is planning to increase its operations into the Asian and European cannabis market.

Supply and Distribution Agreement in Germany

According to an ASX announcement dated 1 May 2020, Althea revealed that it had completed a supply and distribution agreement for a 3-year period with Nimbus Health GmbH, which is a pharmaceutical wholesaler in Germany with nearly 25% market share of medicinal cannabis sales.

Althea mentioned that with this agreement, Nimbus would distribute and sell the Company’s comprehensive suite of medicinal cannabis formulations in Germany under the brand name of Althea starting in H2 CY2020.

Furthermore, the Company stated that it would receive payment for products supplied to Nimbus, in conjunction with the net profit of 50% on sales and it would preserve possession of all real-world anonymised patient information gathered through Althea Concierge™.

March Quarter Highlights:

On the cash flow front, the Company recorded unaudited revenue of nearly $1,52 million for the March quarter, demonstrating an upsurge of 39% from the December quarter. The cash receipt from customers in March quarter stood at $1.49 million.

The Company reported nearly 5.8k patients at the end of three months to March with 596 new added in March. The number of Healthcare Professionals (HPs) having prescribed Althea’s the medicinal cannabis formulations also increased to 509, as of 31 March 2020.

AGH stock rose by 5.128% to close the day’s trade at $0.410 on 11 May 2020. With a market cap of $90.99 million, the Company has 233.31 million outstanding shares on the ASX.

Little Green Pharma Ltd (ASX:LGP)

ASX-listed medicinal cannabis player Little Green Pharma Ltd is into the cultivation and production of cannabis through to manufacturing and distribution. The Company has its indoor cultivation capacity in Western Australia, and an exclusive partnership with a GMP licensed pharmaceutical manufacturer for LGP branded medicinal cannabis formulations.

LPG granted Manufacturing Permit by ODC

On 11 May 2020, Little Green Pharma revealed that the Company had received a grant from the Office of Drug Control (ODC) over its manufacturing facility.

The Manufacture Permit will allow LGP to manufacture cannabis extracts for supply to holders of Therapeutic Goods Administration (“TGA”) GMP manufacturing licences to produce finished medicinal cannabis products.

The Permit has been granted until 10 March 2021, which aligns it with the terms of LGP’s ODC Medicinal Cannabis and Manufacture licences.

To Read The Rest Of This Article By Staff on Kalkine Media

Published: May 11, 2020

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