Why has the THC share price climbed 13% in 2 days?

The THC Global Ltd (ASX: THC) share price climbed 13% after the company emerged from its trading halt with a grant for a second cannabis manufacturing licence.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The THC Global Group Ltd (ASX: THC) share price climbed 5.92% higher yesterday and a further 7% this morning after the company emerged from its trading halt with a grant for a second cannabis manufacturing licence.

What did THC announce yesterday?

After entering a trading halt on Friday, THC yesterday announced that its wholly owned subsidiary, THC Pharma Pty Ltd, has been granted a licence from the Australian Office of Drug Control for its Southport manufacturing facility.

CEO Ken Charteris commented that THC now has the largest biopharma extraction facility in the Southern Hemisphere and the company is ready to commence production of Good Manufacturing Practice (GMP)-compliant active pharmaceutical ingredient (API) isolates at globally significant volumes and competitive pricing.

THC estimates that the initial annual production from the Southport facility will be more than 12,000 kilograms of GMP API isolates, with the ability to further process these extracts into finished medicines such as oils and capsules where necessary.

The Australian-produced Southport products are expected to be available for Australian clinical and study trials, as well as being exported to Asia to use in foreign clinical and study trials.

THC expects that it will complete product validation activities at the facility in Q419, followed by commencement of significant revenue-generating medicinal cannabis production commencing in early 2020.

The licence that the company has received also enables THC to further expand its product formulation and development activities to develop "the next generation of medicinal cannabis products".

THC expects these to drive medium-term revenue as it launches its new proprietary products into markets in Australia and further abroad.

What's been happening to the THC share price?

With yesterday's 5.95% share price increase, and today's 7% move, THC is now trading broadly flat throughout 2019 and boasts a market capitalisation of $65 million, as at yesterday's close.

The company is still very much in the small-cap range on the ASX but this latest development does pave the way for the company to become a bigger player in the highly competitive global export market for cannabis products.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

A young woman smiles as she rides a zip line high above the trees.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors kicked off the trading week in style today.

Read more »

Person pointing at an increasing blue graph which represents a rising share price.
Share Gainers

Why Liberty, Lovisa, Novonix, and SG Fleet shares are storming higher today

These shares are starting the week strongly. But why? Let's find out.

Read more »

Young girl drinking milk showing off muscles.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a great end to the trading week for ASX investors today.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

3 ASX 200 stocks smashing the benchmark this week

These three ASX 200 stocks are leading the charge this week. Here’s how.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why A2 Milk, EOS, GQG, and Mineral Resources shares are racing higher today

These shares are ending the week strongly. But why?

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »

two men smiling with a laptop in front of them, symbolising a rising share price.
Share Gainers

Why Pinnacle, PWR, Race Oncology, and Vulcan shares are flying today

These shares are having a good session on Thursday. But why?

Read more »

A beautiful woman holds up one finger with one hand and has her hand on her waist with the other as she smiles widely as though she is very pleased about something.
Share Gainers

Why Boss Energy, Emeco, Mineral Resources, and Plenti shares are pushing higher today

These shares are having a good time on hump day. But why?

Read more »