Cannabis Stocks to Watch on the ASX

INN takes a look at some pressing influences on the Australian cannabis space and stocks in the market available for investors.

The Australian legalization of medical cannabis in 2016 launched a flood of companies to the Australian Stock Exchange (ASX), leading investors to ask just which cannabis stocks to watch on the ASX.

Australia’s marijuana sector is young, but with a growing patient base and the possibility of recreational legalization on the horizon, the investment options in the country could prove to be full of opportunity for investors.

Here the Investing News Network takes a look at some of the most pressing influences on the Australian cannabis space and some stocks in the market available for investors.

Cannabis Stocks to Watch on the ASX: What’s affecting share prices on the ASX?

The global cannabis space has been hit hard over the summer of 2019 and the ASX bore some of the brunt as well.

Though Australia is an attractive industry, some experts have expressed hesitation about just how quickly the medical cannabis market has grown in the country and the next steps for the industry.

In a note to investors shared on November 12, Canaccord Genuity Australian equity analysts Cameron Bell and Matthijs Smith said the Australian cannabis industry is a case of “smoke without fire,” adding that Canaccord’s Australian Cannabis Index dropped about 40 percent over the course of four months.

There have also been some leading cannabis public firms that have decided to alter their operations in Australia.

In October, Canopy Growth (NYSE:CGC,TSX:WEED), Cronos Group (NASDAQ:CRON,TSX:CRON) and Aphria (NYSE:APHA,TSX:APHA) all confirmed significant changes to their Australian operations.

The shift included a 37 million share sell-off of the stake in Althea Group Holdings (ASX:AGH) held by Aphria.

Canopy Growth ended the three-year relationship between itself and Australian marijuana firm AusCann Group Holdings (ASX:AC8) when it announced the sale of its 13.2 percent interest in the company on October 15. Canopy Growth shook off over 42 million shares in the sell-off.

On a more positive note, the recent legalization of cannabis in Australia Capital Territory could usher in a new wave of opportunity for cannabis firms as well as more international investment.

Patient numbers have also been up as of late. In its report from Q3 2019, cannabis research firm FreshLeaf Analytics said the patient approval rate increased exponentially in 2019, with almost 30,000 new patient approvals going forward.

FreshLeaf also noted an increase of products in the market to 76 available from the 54 reported in the first quarter of 2019, upping product competition.

Cannabis Stocks to Watch on the ASX: Stocks worth watching in 2020

Here INN offers a closer look at some of the cannabis stocks to watch on the ASX, per largest market capitalization to date and included in the Canaccord Australian cannabis index.

EcoFibre (ASX:EOF)

Market cap: AU$1.1 billion

We kick off our list with the biggest cannabis stock on the ASX by far, EcoFibre.

The New South Wales-based firm has it hands in industrial hemp, boasting over 300 landraces of cannabis from over 25 countries globally, including hemp cultivation in the US.

EcoFibre works through multiple businesses that cover everything from high-quality hemp extracts for pharmaceutical use to hemp-based textiles to hemp food products, including hemp flour and hemp protein powder.

In October, the firm got a nod from the NASDAQ after the exchange brought EcoFibre into the Nasdaq International Designation program under the symbol “EOFBF.” Though the program is over-the-counter, non-US companies can use it to increase their visibility to American investors.

In terms of its medical research, EcoFibre released the results of a cannabidiol (CBD) pain study conducted through Ananda Health, one of its core businesses. The study found that 53 percent of patients who had originally used opioids to manage pain reduced their opioid usage after adding Ananda Heath’s full spectrum hemp extract to their treatment regimen.

In its financial report for its fiscal 2019 year, EcoFibre reported a 519 percent increase in revenue from 2018 to AU$35.6 million. Its products are currently sold in 3,200 independent pharmacies in the US.

Elixinol Global (ASX:EXL,OTCQX:ELLXF)

Market cap: AU$151.7 million

While the New South Wales-based company is listed on the ASX, it has operations across the world, including its subsidiary Elixinol USA, a manufacturer of industrial hemp products such as hemp-infused skincare and hemp dietary supplements in Colorado.

In Q2 2019, the firm reported 18 percent quarter-over-quarter revenue increases to AU$9.9 million. Elixinol Global also expanded its presence in the US marijuana industry after it was awarded a CBD Processor Authorization by the New York State Department of Agriculture Markets.

Apart from its work in North America, Elixinol Global’s Dutch subsidiary, Elixinol BV, signed a distribution agreement with Harmonia Life Oy, which will sell Elixinol Global branded marijuana products through retail channels in Finland over the next five years.

Elixinol Global’s European expansion doesn’t stop there. The company is using its Dutch operations to partner up with 25th Group and leverage its retail channels in Belgium and Luxembourg, the latter of which is seeking to be the first country in Europe to legalize recreational marijuana. Similarly to the Harmonia Life Oy deal, the two countries will be supplied with Elixinol Global branded medical cannabis products over the next five years. The deal also gives Elixinol Global access to retailers in the Netherlands and Switzerland.

Elixinol Global also has its hands in CBD pet care. In August, the firm announced a partnership with Altmed Pets, which trades as Pet Releaf. The deal with the pet CBD company comes with the purchase of US$18 million worth of marijuana products over 18 months. Elixinol also gets a 25 percent equity interest in Pet Releaf.

Botanix Pharmaceuticals (ASX:BDA)

Market cap: AU$96.7 million

Clinical stage CBD company Botanix Pharmaceuticals has a particular focus on treating skin diseases, including acne, psoriasis, dermatitis and rosacea, with a transdermal delivery system.

However, the Western Australia-based company also has an interest in using CBD. In fact, the firm is preparing the first human trials of a proprietary drug system that delivers synthetic CBD-based medicines to the skin.

Botanix Pharmaceuticals recently partnered up with pharmaceutical-grade CBD provider Purisys in a supply agreement that covers Botanix’s needs for synthetic CBD as it continues its clinical trials.

The company’s research efforts got a boost from an innovation grant it was awarded from the government’s AusIndustry division. The new funding will go toward Botanix’s medical chemistry program, which aims to isolate new synthetic versions of CBD and look into the possible antimicrobial properties of the drug.

Althea Group Holdings (ASX:AGH)

Market cap: AU$94.58 million

Althea has seen massive growth in its patient base. The firm announced it was serving 3,000 patients by the end of October — a big jump from the 127 patients it was servicing in October last year — and it remains optimistic it will hit 4,000 patients by the end of 2019.

Althea has the benefit of having an online hub, Concierge, that serves both medical practitioners and medical marijuana patients.

Healthcare workers can use Concierge to access patient treatment plans, and patients get the chance to record their own thoughts about their personal treatment using the hub.

In November, the Australian Centre for Cannabinoid Clinical and Research Excellence (ACRE) and Althea got together for ACRE’s clinical cannabinoid cancer trial in New South Wales. Althea, along with other marijuana suppliers, will offer its products as a part of the trial.

In terms of its work outside of Australia, Althea is focusing its international operations in Germany, a medical marijuana market in Europe that some experts say could be one of the largest in the world. Through a memorandum of understanding with global pharmaceutical wholesaler Nimbus Health, Althea plans to use nimbus health’s pharmacy network to distribute its products across the western European country.

Adding on to its retail moves in Germany, Althea will also be developing a Concierge platform for the German market to “help fill a gap in the German market which, despite being advanced in terms of patient numbers, lacks educational initiatives focused on clinical evidence and patient access to medicinal cannabis,” the company said.

Medlab Clinical (ASX:MDC)

Market cap: AU$79.7 million

Medical research and development company Medlab Clinical seeks to use medical marijuana in creating new bio-therapeutics medicines to address chronic ailments such as kidney disease and prediabetes.

Sean Hall, CEO of Medlab, said their work aims to service the global medical marijuana industry and help ease chronic health concerns.

“Global population trends in chronic disease prevalence are reporting increasing numbers of patients diagnosed with various chronic diseases and an acceleration in disease severity,” he said.

To tackle those concerns, Medlab has worked through five core research programs all trying to take advantage of cannabis’ therapeutic benefits.

Recently, Medlab reported a record-breaking month for income generation and medication sales. The firm’s US operations also received its first export order for its proprietary NanoCBD product to Hong Kong.

Speaking of the US, Medlab also plans to take a share of the American marijuana space after signing an agreement with manufacturer ANC that will allow it to distribute its nutraceutical products to the North American country.

Total revenue for its fiscal 2019 year was AU$8.1 million, compared to the AU$5.5 million generated in 2018. Medlab had AU$19.1 million in assets at the end of its fiscal 2019 year.

Cannabis Stocks to Watch on the ASX: Investor takeaway

The marijuana space in Australia is still attempting to find its footing at the global landscape, and investors have their pickings when it comes to which cannabis stocks to watch on the ASX market.

The rise of medical cannabis, however, does pose an interesting opportunity for investors who want to pursue diversifying plays in the at-large cannabis sector.

Don’t forget to follow us @INN_Australia for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

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WHAT'S IN STORE FOR THE CANNABIS SECTOR IN 2022?

The Investing News Network (INN) spoke with analysts, market watchers and insiders about which trends will impact this sector in the year ahead.

✓ Trends   ✓ Forecasts    ✓ Top Stocks


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Zelira Therapeutics Ltd a global leader in the research and development of clinically validated cannabinoid medicines, is pleased to announce the US launch of the Zelira Dermatology Business’ first product line, RAF FIVE ™ through its dermatology subsidiary Ilera Derm LLC . The five-product RAF FIVE ™ line consists of the Wash Away Gel Cleanser Acne Treatment, Spot On Acne Treatment, Kick Off Hydrating Lotion …

Zelira Therapeutics Ltd (ASX: ZLD) (OTCQB: ZLDAF), a global leader in the research and development of clinically validated cannabinoid medicines, is pleased to announce the US launch of the Zelira Dermatology Business’ first product line, RAF FIVE ™ through its dermatology subsidiary Ilera Derm LLC (“Zelira Dermatology”).

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Highlights: Peak Processing Solutions subsidiary of Althea Group Holdings has entered into agreements with BBCCC, Inc., The Boston Beer Company and WeedMD Rx Inc., a subsidiary of Entourage Health Corp. Under the product development agreement, Peak will provide research and development services including laboratory support and the testing of various product formulations and recipes, for the new line of BBC products …

Highlights:

  • Peak Processing Solutions (Peak), subsidiary of Althea Group Holdings (ASX: AGH) (Althea) has entered into agreements with BBCCC, Inc., The Boston Beer Company (NYSE: SAM) (‘BBC’), and WeedMD Rx Inc., a subsidiary of Entourage Health Corp. (‘Entourage’)
  • Under the product development agreement, Peak will provide research and development services including laboratory support and the testing of various product formulations and recipes, for the new line of BBC products
  • BBC will provide Peak with funding of up to USD$2m for capital improvements associated with the development project. In addition, Peak will receive a minimum of USD$285,000 for each year of the Term of the agreement (totalling USD$1.42m )
  • Under the 5 year supply and manufacturing agreement, Peak is the exclusive manufacturer of all cannabis beverages produced or sold in Canada under BBC branding, for the term of the agreement
  • Entourage will be responsible for distribution and sales of the cannabis-infused beverages in Canada

Peak Processing Solutions, a subsidiary of Althea Group Holdings Limited (ASX: AGH) (‘Peak’ or ‘the Company’) is a leading developer, manufacturer, and distributor of cannabis infused edible, topical, and concentrate products is pleased to announce that the Company has entered into agreements with WeedMD Rx Inc., a subsidiary of (TSXV: ENTG) (OTCQX: WDDMF) (‘Entourage’) and BBCCC, Inc., a subsidiary of the Boston Beer Company Inc. (NYSE: SAM) (‘BBC’).

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Work at the company’s Cancet project is building toward a maiden resource in Q1 2023, said Managing Director Chris Evans.


Although prices have cooled off from the highs seen earlier this year, the lithium market remains in focus and investors are interested in how to get exposure to the green energy transition.

Chris Evans, managing director at Winsome Resources (ASX:WR1), said Australian investors in particular are aware of the lithium opportunity, and reacted well to the company’s ASX listing this past November.

The company initially came to market with three lithium assets in the James Bay region of Quebec, and has since acquired two additional lithium projects in the province.


Speaking to the Investing News Network, Evans explained that Cancet is the company’s main focus. Recent assay results released during the Prospectors & Developers Association of Canada (PDAC) convention build on previous drilling at the property, and have increased the known pegmatite strike length to 1,200 meters from 600 meters.

Looking forward, Evans said that two geological teams are now on the ground at Cancet, and are investigating targets identified through geophysical surveys to figure out which of them require drilling.

Known pegmatites that have already been drilled are also being stripped and cleared so that the company can complete field mapping and decide where to drill next.

“Really all that’s working towards a maiden resource in the first quarter of 2023,” said Evans.

In terms of the overall lithium market, he said a recent Goldman Sachs (NYSE:GS) report saying the battery metals bull market is “over for now” put a damper on sentiment, but is generally not thought to be a major concern.

“I think that probably initiated a bit of a correction in the market, which may have been needed because lithium prices and stocks were at all-time highs,” he said. “But in terms of an oversupply like Goldman Sachs is predicting, I haven’t heard anyone agree with that since I’ve been here at PDAC.”

Watch the interview above for more from Evans on Winsome Resources and its plans for the next six months. You can also click here for our recap of PDAC, and here for our full PDAC playlist on YouTube.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Winsome Resources is a client of the Investing News Network. This article is not paid-for content.

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

person using credit card to pay for something on their phone

Revenue from Australia's mobile sector is expected to grow from AU$9.6 billion in 2021 to AU$11.2 billion in 2026. Here's what to know about this industry.

After lagging behind for a prolonged period, Australia's tech sector is ramping up at an accelerated pace. The tech sector is now equivalent to 8.5 percent of the country's GDP as of the end of 2021, an increase of 26 percent since the onset of COVID-19 through June 2021 and a massive 79 percent increase over the past five years. Tech contributes AU$167 billion to the Australian economy, trailing only the mining (AU$205 billion) and financial/insurance (AU$169 billion) sectors.

Australia's characteristically resilient economy — which had not experienced a recession in nearly 30 years prior to COVID-19 lockdowns — has provided a sturdy backdrop for its growing tech sector. The growth in the tech sector’s contribution to the GDP has outpaced average growth of other industries by more than 400 percent, a gain partly attributable to accelerated digital technology adoption during the pandemic.

This dramatic expansion is largely in response to Australia's need to catch up to the rest of the world and assert itself in the global tech marketplace. Should the tech sector continue to grow at its current rate it will eventually surpass the relative GDP contribution of the long dominant mining sector. This will also complete the process of bringing Australia more in line with other western economies such as the UK, and notably Canada, which is comparable to Australia in terms of its dominant mining and agricultural industries.


In terms of digital innovation earnings as a percentage of GDP, for example. Australia stands at 7.4 percent, significantly behind the 11.2 percent average for companies that are part of the Organisation for Economic Cooperation and Development (OECD). According to its September 2021 Policy Primer report, the Australian Academy of Sciences called for the federal government to place greater emphasis on supporting emerging digital technologies.

"Australia risks falling behind as a technologically-driven nation unless we recognise emerging digital technologies as a central, independent sector in its own right, warranting investment in the core aspects of research, innovation, and workforce development," the report stated.

Understanding Australia's mobile tech landscape

One of the drivers of Australia's tech sector expansion is its booming mobile telephone industry. This expansion has taken many forms ranging from expanded use of mobile telephony, adoption of blockchain technology for supply chain management and the rise of the cryptocurrency market. The application of mobile tech to the banking industry is just one space where mobile usage has become key and is expected to continue developing. According to research firm KPMG, digital platforms will become the preferred and dominant business model form.

Chase Bank completed a survey revealing that the COVID-19 pandemic has accelerated the adoption of mobile banking technology. Banking apps allow users to deposit cheques, pay bills and perform transfers from their mobile device.

One critical side effect of COVID-19 has been the way lockdowns and related restrictions on behaviour has changed the way people live and work. Remote working conditions and enforced isolation has triggered increased demand for improved connectivity and internet speeds to facilitate this transition in corporate culture during the pandemic.

As a result, Australia's leading mobile telephony giants have been obliged to improve data capacity and speed, especially in regional areas that have badly lagged behind urban coverage. Some people have relocated to regional areas — where connectivity remains a challenge — and others are requiring more data capacity and fast speeds to allow them to work more efficiently from home.

The Australian mobile sector is dominated by three main players: Telstra (ASX:TLS), Optus — a subsidiary of Singapore-based Singtel (SGX:Z74) — and TPG Telecom (ASX:TPG). Telstra is the largest provider of mobile services with 48.7 percent market share followed by Optus at 26.3 percent.

In 2022, there have already been several major new developments in the Australian mobile sector. One such event has been the tentative network sharing agreement announced in February between Telstra and TPG Telecom, which brings an end to the bitter rivalry between the two competitors. The agreement provides a comprehensive framework for the two telecom giants to share mobile telecommunication infrastructure across Australia.

TPG and Telstra will both enjoy significant savings and benefits from this arrangement. Telstra will reap up to AU$1.8 billion in added revenues while gaining access to TPG's spectrum that expands Telstra's fixed wireless services in regional areas. Correspondingly, TPG gains access to 3,700 Telstra towers in regional areas; this means TPG does not have to spend significant money to duplicate the infrastructure for its own use.

In addition, Telstra announced earlier in the year that it will spend up to AU$1.6 billion on new infrastructure intended to improve connectivity and internet speeds as part of its response to the overall need to accommodate rising consumer demand in the wake of the pandemic.

What's the outlook for mobile tech in Australia?

One of the positive side effects of the pandemic has been the increasing adoption of wireless services by Australians and the ownership of internet-of-things devices that are prevalent in nearly all households.

According to GlobalData, a data and analytics company, mobile sector revenue in Australia is expected to grow from AU$9.6 billion in 2021 to AU$11.2 billion in 2026 at a compound annual growth rate of 3 percent. This revenue growth will mainly accrue from growth in the mobile data subsector.

Meanwhile, the three leading telephone companies will not only be expanding their 4G services but rolling out 5G networks across the country. 5G allows for improved and additional smartphone services and also enhances fixed wireless services that are competitive with higher speed National Broadband Network (NBN) connections.

In addition, low earth orbit satellite services are beginning to roll out in Australia led by Elon Musk's SpaceX's Starlink service that offers broadband connections delivered via its satellite network.

Overfall, the winding down of restrictions due to COVID-19 will likely see the big three companies enjoy higher revenues in 2022 after declines in earnings owing to the pandemic. Telstra, Optus and TPG Telecom all experienced significant earnings drops between 2020 and 2021 due to reduced international roaming fees, softening demand for headsets and ongoing adoption of NBN services.

But the outlook for 2022 is positive given overall improved economic prospects as Australia emerges from the pandemic, which actually increased overall consumer use of communication services in 2021.

Lockdowns resulted in increased consumer uptake of online services such as online shopping, data-intensive video streaming and the additional household usage of communication services. Indeed, in 2021, data traffic reached record highs as Australian consumers demanded improved internet speeds and unlimited data plans. Remote work will likely continue to remain elevated in 2022 and beyond, which should reinforce increased consumption of home communications services.

Telstar and TPG Telecom in particular are embarking on long term strategies that will drive future earnings growth via accelerating 5G adoption, expansion in dark fibre, and increased adoption of new services such as edge/cloud computing.

Don’t forget to follow us @INN_Australia for real-time updates!

Securities Disclosure: I, Harold Von Kursk, hold no direct investment interest in any company mentioned in this article.

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