The market may have dropped lower this morning, but that hasn't stopped the MGC Pharmaceuticals Ltd (ASX: MXC) share price from pushing notably higher.
At one stage the cannabis company's shares were up 19% at an all-time high of 12.5 cents before fading slightly. At the time of writing its shares are 9.5% higher to 11.5 cents.
Why are MGC Pharmaceuticals' shares surging higher today?
This morning MGC Pharmaceuticals made an announcement relating to its European medicinal cannabis manufacturing facility.
According to the release, the company has been formally granted interim Good Manufacturing Practice (GMP) certification for the facility.
The interim certification means the company can commence production of the first batch of its adult medical cannabis epilepsy product CannEpil.
Upon successful production of the first batch of CannEpil, the batch will undergo validation of manufacturing and analysis. After which, if the product meets the required protocols, management expects the facility will be granted full GMP certification.
This will then allow MXC Pharmaceuticals to commence full scale manufacture and be licensed for distribution of CannEpil and other pharmaceutical grade medicinal cannabis products.
What is CannEpil?
CannEpil is the company's first pharmaceutical-grade medical cannabis product and is targeting drug-resistant epilepsy. Drug-resistant epilepsy, also known as refractory epilepsy, is a potentially lucrative market and accounts for approximately 30% of the estimated 240,000 people diagnosed with epilepsy in Australia each year.
Management estimates that the product will generate revenue of $1 million per annum from its first full year of distribution with specialist Australian pharmaceutical distributor HL Pharma.
Should you invest?
I've been impressed with MXC Pharmaceuticals over the last few months and believe it has shown a lot of promise. As well as this product, the company has signed a number of agreements in the cosmetic industry that have the potential to generate meaningful revenues.
While I'm not ready to invest, I think it will certainly be one to watch this year along with fellow pot stocks Auscann Group Holdings Ltd (ASX: AC8) and Creso Pharma Ltd (ASX: CPH).
