Shares in ASX cannabis stock THC Global Group Ltd (ASX: THC) rocketed 13.70% higher in yesterday’s trade after a manufacturing update.
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 Motley Fool Australia.
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