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Why this ASX cannabis share is racing higher on Thursday

James Mickleboro
Cannabis shares

The Cann Group Ltd (ASX: CAN) share price is having a rare positive day of trade.

In morning trade the cannabis company’s shares are up 4% to $1.05. This has reduced its one-month decline to approximately 30%.

Why is the Cann Group share price on the rise?

The catalyst for today’s gain was an announcement relating to a product launch and a distribution agreement.

According to the release, Cann Group is launching a range of imported medicinal cannabis products for supply to approved Special Access Scheme (SAS) patients.

It is doing this after entering into a distribution agreement with healthcare services and products supplier Symbion.

Symbion currently supplies healthcare services and products to more than 4000 retail pharmacies and 1300 hospitals throughout Australia. It will carry Cann’s full range of imported products. These are for supply to approved SAS patients in line with each state’s legislative requirements.

Cann CEO, Peter Crock, was happy with the Symbion agreement. He said: “the distribution arrangement with Symbion will ensure that products can be supplied through approved pathways to patients throughout Australia who have been approved via the Special Access Scheme for medicinal cannabis treatment.”

Management also revealed that is well advanced in its product manufacturing validation program with IDT Australia Limited (ASX: IDT). It expects to launch its first locally sourced and manufactured formulations in the first quarter of 2020.

The CEO notes that the company is now entering its commercialisation phase after establishing a reliable cultivation and production capability.

“We are now operating our existing Southern and Northern production facilities at full capacity, with in excess of 40 harvests now completed, and we are advancing our product manufacturing capabilities with IDT Australia,” he added.

Elsewhere in the industry today, things aren’t going quite as positively for its rivals. The Auscann Group Holdings Ltd (ASX: AC8) share price has fallen 5.5% to a 52-week low. Whereas the Elixinol Global Ltd (ASX: EXL) share price is 1% lower at $1.48. This leaves it just 2 cents away from its own 52-week low.

The post Why this ASX cannabis share is racing higher on Thursday appeared first on Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019