On Monday and Tuesday Australia's medicinal cannabis industry was absolutely smoked by the market, making it the worst performing area of the market by some distance.
But thankfully for its investors, today it is the turn of medicinal cannabis shares to do the smoking.
Here are the highlights from the industry after lunch:
- The Auscann Group Holdings Ltd (ASX: AC8) share price has surged 28% higher to $1.60.
- The Botanix Pharmaceuticals Ltd (ASX: BOT) share price is up 8% to 13 cents.
- The Cann Group Ltd (ASX: CAN) share price has jumped 14% to $2.84.
- The Cannpal Animal Therapeutics Ltd (ASX: CP1) share price is 7% higher at 23 cents.
- The Creso Pharma Ltd (ASX: CPH) share price is up 12% to 90.5 cents.
- The MMJ Phytotech Ltd (ASX: MMJ) share price is 13.5% higher at 46.5 cents.
- The Hydroponics Company Ltd (ASX: THC) share price has climbed 8% to 77 cents.
- The Zelda Therapeutics Ltd (ASX: ZLD) share price is 14% higher at 12.5 cents.
Why are cannabis shares climbing higher?
As well as investors flicking the risk-on switch again today, these gains can be attributed to the moves higher that were made by their international peers overnight. Canadian cannabis giants Canopy Growth Corp and Aurora Cannabis both surged higher on the Toronto stock exchange on Tuesday.
Canopy Growth Corp's shares rose 19% during trade on Tuesday, adding approximately C$850 million to its market capitalisation.
Aurora Cannabis went one better with a 25% gain, adding over C$1 billion to its market capitalisation.
Should you invest?
As I have said previously, I think one or two of these shares could have bright futures ahead of them if they can dominate the Australian market.
But given how early it is and how competitive the market is, it is reasonably hard to predict which companies will emerge as market leaders.
In light of this, I continue to believe that investors ought to hold out until it becomes clear which companies will rise to the top.
