Although the market is struggling to stay in positive territory today, one area of the market is certainly not letting that hold it back.
Australian pot stocks are once again smoking the market. Here's the state of play in the industry at lunch:
- The Auscann Group Holdings Ltd (ASX: AC8) share price is up 7% to 86 cents.
- The Cann Group Ltd (ASX: CAN) share price is 3% higher at $2.94.
- The Cannpal Animal Therapeutics Ltd (ASX: CP1) share price has climbed 5% to 22 cents.
- The Creso Pharma Ltd (ASX: CPH) share price is up 8% to $1.00.
- The Hydroponics Company Ltd (ASX: THC) share price is up 4.5% to 72 cents.
- The MMJ Phytotech Ltd (ASX: MMJ) share price is 4.5% higher to 48 cents.
- The Zelda Therapeutics Ltd (ASX: ZLD) share price is up 5% to 10 cents.
What happened?
Today's gains appear to be related to a surge in pot stocks in Canada overnight following the legalisation of recreational cannabis in California and the launch of a pot stock ETF.
According to Bloomberg, there were long queues to buy cannabis in California following its legalisation. This has left many expecting similarly strong demand for recreational cannabis in Canada when it becomes legal in July.
One Australian company in particular that could profit directly from this potential boom is Creso Pharma. It spent approximately $10 million in cash and equity to acquire emerging Nova Scotia-based medicinal cannabis producer Mernova Medicinal Inc. last year.
Not only did this give it access to the medicinal cannabis market in Canada, but it allows Creso to pursue opportunities in Canada's soon to be legalised recreational cannabis space.
This, and other ventures undertaken late last year, could potentially mean Creso is generating meaningful revenues in the not so distant future.
