One of the best performers on the Australian share market on Friday has been the Althea Group Holdings Ltd (ASX: AGH) share price.
The cannabis company's shares were up as much as 39% to 52.5 cents at one stage. Its shares have since given back a good portion of these gains, but still sit higher by 15.5% at 44.5 cents.
Why did Althea's shares rocket higher today?
This morning Althea announced that it has been granted a Manufacture Licence by the Australian Government's Office of Drug Control.
According to the release, the licence provides Althea with authorisation to manufacture extracts and tinctures of cannabis and cannabis resin in accordance with relevant manufacture permits.
Althea's CEO Josh Fegan appeared to be delighted with the news.
He said: "Althea is excited at receiving our Manufacture Licence. Coupled with the existing Medicinal Cannabis Licence, Althea can now proceed with the next phase of planning for our Victorian based production facility. Althea shareholders can look forward to a vertically integrated, seed-to-sale, state of the art medicinal cannabis operation, comparable to that of our Canadian partner Aphria,"
As of yesterday's close, Aphria was valued at a sizeable C$3.8 billion, making it one of the biggest cannabis companies in the world.
In addition to this, Mr Fegan updated the market on the company's patient approvals and prescribing doctors
He advised that: "Patients approved for Althea medicinal cannabis products have quickly surpassed the recent 100 patient milestone, with 127 patients now approved."
There has been similarly solid growth in the number of doctors prescribing its products. These have increased from 42 to 50 during the last couple of weeks.
It is, however, still a long way off its target of 1,000 patient by this time next year. Though, it believes the "comprehensive work we are doing educating mainstream doctors across Australia, makes that a distinct possibility."
Should you invest?
I like what I've seen with Althea since its listing and believe it is up there with Auscann Group Holdings Ltd (ASX: AC8) and Cann Group Ltd (ASX: CAN) as having the best chance to succeed in the fiercely competitive domestic market.
However, whether or not medicinal cannabis actually takes off in Australia, only time will tell.
Because of this and the reasonable amount of success already being baked into their shares, I would suggest investors restrict these cannabis companies to just their watchlists for the time being.
