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Guide to Investing in Cannabis Stocks on the ASX

INN takes a look at projections for the cannabis industry in Australia and what they may mean for investors.

Australia’s medical cannabis market is young, but with new products set to come online, a growing push towards recreational marijuana legalization and increased clinical research, Australia could offer a unique marijuana investment opportunity.

Investors are eagerly awaiting the potential growth projected for the Australian cannabis space, as the into its own version of Cannabis 2.0 with companies poised to begin generating meaningful revenue.

Here we take a look at projections for the cannabis industry in Australia and what they may mean for investors. Read on to see what you need to know as an investor looking at stocks down under.

Investing in cannabis stocks on the ASX: Risks and benefits for ASX pot stocks

Medical cannabis was legalized in Australia in 2016 when the Narcotic Drugs Act was amended, allowing cannabis to be grown for medical and scientific purposes.

Since then, Australia’s medicinal marijuana industry has been hit by the slump currently dragging down marijuana markets across the world.

In a note to investors sent out in November, Canaccord Genuity Australian equity analysts Cameron Bell and Matthijs Smith said the Australian marijuana market currently offers “smoke without fire.”

The duo added that Canaccord’s Australian Cannabis Index dropped about 40 percent over four months.

The Australian marijuana market has also had to contend with a drastic shift in international investment. In October, some Canadian firms adjusted their global expansion plans in Australia due to the conditions seen in the cannabis industry.

AusCann Group Holdings (ASX:AC8) is now left without the support of Canopy Growth (NYSE:CGC,TSX:WEED) after the Canadian producer announced the sale of its 13.2 percent interest AusCann, raking in C$6.3 million.

Althea Group Holdings (ASX:AGH) also faced a loss after it was found that Aphria (NYSE:APHA,TSX:APHA) was looking to sell 37 million shares of its minority stake in Althea, according to a report from Australian Financial Review, after originally investing C$2.5 million in the Melbourne cannabis firm in 2018.

Despite the struggles of the stock market, the local industry has picked up thanks to the rush of new medicinal marijuana products becoming available to consumers.

According to Australian marijuana research firm FreshLeaf Analytics, during Q3 of 2019, 76 new products were introduced in the market, up from 54 in Q1.

The uptick has been represented in the patient count, as well.

“Although we note the early stage of the sector in Australia and the associated volatility of a nascent industry, over the same period patient numbers domestically have continued to soar,” Bell and Smith wrote in their note.

In October, the Therapeutics Goods Association (TGA), the country’s regulator of medical cannabis, handed out 3,594 approvals for unapproved medicinal cannabis under SAS Category B (SAS-B).

The pair from Canaccord said this represents a 23 percent increase over patient approvals in September and that 92 percent of the over 20,000 SAS-B approvals have taken place within the last 12 months.

The pair is also projecting that Australia is now on track to have over 25,000 approvals by the end of the year, while FreshLeaf expects between 30,000 to 50,000 patients will receive an approval in 2020.

At the local level, Bell and Smith said the rise in patient approvals could be attributed to legislation put in place in New South Wales that loosened the requirements for prescribing medical marijuana. Now, unless the patient is under 16 years old or has a history of drug abuse, medical practitioners in New South Wales can prescribe cannabis medicines without having to refer to a specialist.

There’s also been a decrease in pricing pressure for medical cannabis patients throughout the country. FreshLeaf reported spending from medical cannabis patients was down to AU$395, from AU$415.

Investing in cannabis stocks on the ASX: Projected growth for ASX stocks

There has been a recent increased movement to legalize the drug for recreational use thanks in large part to its legalization in the Australian Capital Territory (ACT), back in September, the first region in the country to do so. There has been movement to legalize the drug for recreational use thanks to the Australian Capital Territory (ACT) became legalization action back in September; it was the first region in the country to do so. The new law is set to go into effect in 2020 and allows individuals over 18 to possess up to 50 grams of dried flower and cultivate two cannabis plants in their home, with a maximum of four plants per residence.

Export markets have also continued to open up, according to Bell and Smith, since the shipment of the drug out of the country was legalized in 2018. The country has expressed its desire to become one of the largest international cannabis suppliers.

On a local radio station, Australian Health Minister Greg Hunt said, “We’d like to be potentially the world’s number one supplier.”

A 2018 report from Prohibition Partners has forecasted that medical cannabis in Australia could be worth US$2.13 billion by 2028, while recreational cannabis could rake in US$5.53 billion in the same span of time.

In the report, Peter Comerford, CEO of Australia health care product wholesaler Anspec, said the country is in a solid position to “capitalise on whichever aspects of this new industry that it chooses.”

Investing in cannabis stocks on the ASX: Investing in ASX cannabis stocks

Here is a closer look at the top four stocks on the Australian cannabis index from Canaccord.

Clinical stage CBD company Botanix Pharmaceuticals (ASX:BDA) works on using cannabidiol (CBD) in its treatment of skin conditions including acne, psoriasis, dermatitis and rosacea.

In fact, the company is preparing the first human trials of a proprietary drug system that delivers synthetic CBD-based medicines to the skin.

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

There’s also EcoFibre (ASX:EOF), which boasts a market capitalisation of AU$1 billion. EcoFibre focuses largely on the hemp business, with a wide range of operations that cover everything from pharmaceutical hemp extracts and hemp textiles to hemp food products, including hemp flour and hemp protein powder.

Cann Group (ASX:CAN) was the first Australian company to receive a licence and permit from the government to cultivate medical cannabis in Australia.

With the new production operations, Cann Group estimates it could bring in US$220 million to AU$280 million in dried cannabis sales.

Cann Group will get access to both domestic and international markets after the company announced a five-year offtake agreement with Aurora Cannabis (NYSE:ACB,TSX:ACB) earlier this year. As part of the agreement, Aurora will receive dried cannabis, resin and medical marijuana products from Cann Group.

For its fiscal 2019 year, revenue for Cann Group was at AU$2.3 million, while other income totalled AU$1.9 million.

Though AusCann is no longer attached to Canopy Growth, the firm has already begun to establish itself in the cannabis market in Australia.

In its annual report for its fiscal 2019 year, AusCann reported it generated AU$1.5 million in total revenue, up significantly from the AU$288,878 it generated in 2018. The company also ended the 2019 fiscal year with AU$35.3 million in cash and AU$42.9 million in total assets.

Investing in cannabis stocks on the ASX: Investor takeaway

Though the medical cannabis industry is still in its early stages, increased patient numbers and a push to recreational marijuana use could open the market to novel investment opportunities.

The growing cannabis export space in the country could also further the growth of Australia’s place in the global marijuana markets.

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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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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Sydney, Australia – Medlab Clinical Ltd an Australian biotech using delivery platforms to enhance medicines is pleased to announce the execution of a Master Services Agreement with WEP Clinical Ltd for the exclusive development and delivery of Named Patient Programmes relating to the unlicensed supply of its proprietary NanaBis and NanoCBD to patients in the UK and Europe. This Master Services Agreement is the first …

Sydney, Australia (ABN Newswire) – Medlab Clinical Ltd (ASX.MDC), an Australian biotech using delivery platforms to enhance medicines is pleased to announce the execution of a Master Services Agreement (MSA) with WEP Clinical Ltd (WEP) for the exclusive development and delivery of Named Patient Programmes relating to the unlicensed supply of its proprietary NanaBis(TM) and NanoCBD(TM) to patients in the UK and Europe.

This Master Services Agreement is the first partnership for Medlab to supply their cannabinoid medications outside of its current Australian Special Access Scheme.

Dr Sean Hall, CEO of Medlab stated, “This is a major milestone for Medlab to begin supplying NanaBis(TM) and NanoCBD(TM) on prescription for the first time to patients outside Australia.”

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Which ASX technology stocks performed the best in 2021? Here’s a look at the five top ASX technology stocks by share price performance.

Australia is home to a thriving tech sector with fresh investment opportunities emerging across a variety of subsectors, such as gaming, fintech, healthcare and cleantech.

The technology sector currently contributes about AU$167 billion to the Australian economy, according to research commissioned by the Technology Council of Australia. This figure has increased by 79 percent from 2016, representing a growth rate that is more than four times that of most industries. In fact, the tech sector is the third largest economic sector in Australia, behind mining and finance/insurance.

Unsurprisingly, many tech stocks on the ASX have performed well in this landscape.


Below the Investing News Network profiles the five best ASX technology stocks in terms of share price performance in 2021. Data for the companies was gathered on December 31, 2021, using TradingView’s stock screener, and all of the best ASX technology stocks listed had market caps above AU$10 million at that time.

1. Novonix

Market cap: AU$4.45 billion; year-to-date gain: 659.5 percent

The first of the best ASX tech stocks on this list is battery technology company Novonix (ASX:NVX), which specializes in developing battery testing equipment for the worldwide lithium-ion battery market. The company was spun out from Dr. Jeff Dahn’s lab at Dalhousie University; Dr. Dahn is one of the pioneers of the lithium-ion battery.

While not yet a revenue generator, the company has benefited from the explosive growth expected out of the fast-moving global electric vehicle (EV) industry.

In December, Novonix announced preliminary results from an environmental impact study; they show the company’s synthetic graphite EV and energy storage system (ESS) battery anode product offers an approximate 60 percent decrease in CO2 emissions, potentially making it “2.5 times better for the environment than Chinese synthetic graphite EV and ESS battery anode material,” as per the Market Herald.

2. Oneview Healthcare

Market cap: AU$114.57 million; year-to-date gain: 488.89 percent

Oneview Healthcare’s (ASX:ONE) interactive software platform offers digital tools to healthcare providers, patients and families to improve point of care outcomes.

This past spring, the global healthcare tech company launched its cloud-based care platform. “Deployed on Microsoft Azure, this platform enables health systems to quickly adopt technology for engaging patients, reducing non-clinical demands on care teams and optimising clinical and operational effectiveness,” notes a press release.

Oneview has signed a number of contracts for the use of this platform, including with Omaha’s Children’s Hospital and Medical Center, Northern Health in Melbourne and Kingman Regional Medical Center in Arizona. In late November, Oneview raised AU$20 million in a private placement with plans to use the funds to further product development, scale its cloud enterprise and strengthen its balance sheet.

3. Emyria

Market cap: AU$105.86 million; year-to-date gain: 318.48 percent

Emyria (ASX:EMD) is a healthcare technology company that specializes in data-backed drug development and operates a network of medical clinics. Using proprietary clinical evidence, the company develops registered treatments for underserved medical needs.

Emyria’s current drug development programs center on cannabidiol (CBD) medicines for mental health, CBD/THC treatments for irritable bowel syndrome and MDMA treatments for post-traumatic stress disorder.

In late November, one of Australia’s largest private investment groups, Tattarang, made a AU$5 million investment in Emyria, which will help the company further advance its drug development work.

4. PlaySide Studios

Market cap: AU$445.38 million; year-to-date gain: 139.13 percent

PlaySide Studios (ASX:PLY) develops mobile games, virtual reality, augmented reality and PC games. The company’s portfolio consists of 52 titles, including original intellectual property games, as well as games developed with the worlds’ largest studios, such as Disney (NYSE:DIS), Warner Bros and Nickelodeon.

PlaySide Studios is Australia’s largest publicly listed gaming technology company, and following its 2020 initial public offering, it generated revenue of AU$10.88 million for the 2021 fiscal year. In November, the company inked a landmark deal with 2K Games, a label of Take-Two Interactive Software (NASDAQ:TTWO).

In the last weeks of 2021, PlaySide signed a number of deals, including a contract with Shiba Inu Games and a partnership with One True King to co-develop a PC-based game, which will also provide access to One True King's 21 million global followers.

5. Universal Biosensors

Market cap: AU$175.98 million; year-to-date gain: 127.59 percent

Last on this list of best ASX tech stocks is medical device technology company Universal Biosensors (ASX:UBI), which develops, manufactures and commercializes diagnostic testing systems for point-of-care providers and at-home use. It has products for blood glucose monitoring, coagulation testing, immunoassays and molecular diagnostics.

“UBI’s biosensor technology platform has been used to deliver more than 10 billion diagnostic tests to patients worldwide generating billions of dollars in sales,” states a company presentation. “We have licensed and partnered new technology and new biosensors with global applications.”

In November, Universal Biosensors signed a three year master collaboration agreement with Mayo Clinic Biopharma Diagnostics. The deal includes work on Universal Biosensors’ Tn antigen cancer biosensor. In late December, the company entered into a global exclusive license agreement with IQ Science for the commercialization of a SARS-CoV-2 N-protein detection test that will use Universal Biosensors' proprietary electrochemical strip and device technology.

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

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

australian bills with gold coin
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Looking for the best-performing cobalt stocks on the ASX? Here's a look at the three top gainers of 2021.

Cobalt prices have soared this past year, with investors paying more attention to this battery metal.

A large reason for cobalt’s bullish behaviour is that it is used to manufacture lithium-ion batteries, which power electric vehicles (EVs) — as demand for EVs continues to rise, it's likely cobalt demand will remain strong too.

Currently the future of EVs looks bright — the market is growing quickly and is expected to boom over the next decade. In the first half of 2021 alone, EV sales ballooned by 160 percent, and by the end of the year, a total of 15 countries had announced measures to begin transitioning toward an all-electric future.


The three top cobalt-producing countries worldwide are the Democratic Republic of Congo, Russia and Australia — the last of which is investing in ramping up its production of the metal.

With that in mind, which Australian cobalt miners gained the most value in 2021? Read on to learn more about the three best cobalt companies on the ASX by year-to-date share price gains. All information was obtained on December 30, 2021, using TradingView's stock screener.

1. Jervois Global

Year-to-date gain: 63.89 percent; current share price: AU$0.59

Jervois Global (ASX:JRV) is best known for its Finland operations, which produce cobalt for chemical, catalyst, pigment, powder metallurgy and — most significantly — battery applications. The company is currently in the process of launching its new Idaho Cobalt Operations (ICO) and is on track to become the first US cobalt miner.

On December 15, Jervois announced an update on ICO, saying first ore is expected in August 2022, with sustainable production expected by December 2022. The estimated capital expenditure required to stay on schedule has risen to US$99.1 million, up from US$92.6 million, with mine engineering 64 percent complete.

2. Cobalt Blue Holdings

Year-to-date gain: 177.78 percent; current share price: AU$0.50

Cobalt Blue Holdings (ASX:COB) is a rare cobalt-only company, and defines itself by its planned ethical and sustainable extraction and production processes. The firm's flagship New South Wales-based Broken Hill project is slated to produce an average of 3,500 to 3,600 tonnes per year of cobalt once in operation.

In December 2021, Cobalt Blue Holdings announced it has executed a memorandum of understanding with the State of Queensland, acting through the Department of Resources, to assess opportunities for the recovery of cobalt (as well as any coexisting base and precious metals) from mine waste.

3. Australian Mines

Year-to-date gain: 31.25 percent; current share price: AU$0.21

Australian Mines (ASX:AUZ) is aiming to supply metals to the growing EV industry, with a focus on ethical and sustainable production. Its flagship Queensland-based Sconi nickel-cobalt project boasts a mine life of over 30 years and will be capable of processing 2 million tonnes of ore annually.

In late October, Australian Mines reported on its quarterly activities, including an agreement for Korea-based LG Energy Solution, a top global producer of EV batteries, to buy 100 percent of the Sconi project’s nickel-cobalt hydroxide output over an initial six year term. The future agreement indicates that LG Energy Solution will buy a projected 7,000 tonnes of cobalt from Australian Mines over the six year period.

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

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