Why are these 2 ASX cannabis shares booming all of a sudden?

It wasn't all too long ago that most companies involved in the cultivation and sale of medicinal or recreational marijuana were booming.

| More on:
a man wearing old fashioned aviator cap and goggles emerges from the top of a cannon pointed towards the sky. He is holding a phone and taking a selfie.

Image source: Getty Images

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

Key points

  • These two ASX cannabis shares are back in the spotlight 
  • Cann Group’s shares are surging this week following an expansion of its GMP manufacturing licence in Mildura 
  • Little Green Pharma garnered investor interest after announcing a new agreement with a major German medicinal cannabis distributor 

You're likely not hearing about ASX cannabis shares as much as you used to.

It wasn't all too long ago that most companies involved in the cultivation and sale of medicinal or recreational marijuana were booming. But as the pace of newly opening legal markets slowed, so too did investor enthusiasm for the sector.

So why are these two ASX cannabis shares booming all of a sudden?

Why are these ASX cannabis shares rocketing?

The All Ordinaries Index (ASX: XAO) is down 0.7% in late morning trade, following a retrace in US markets overnight.

But the Cann Group Ltd (ASX: CAN) share price is heading decidedly in the other direction, up 7.7%.

And fellow ASX cannabis share Little Green Pharma Ltd (ASX: LGP) is also up 7.7%.

The big gains come following some positive announcements from both companies earlier this week.

First, here's what Cann Group reported late afternoon on Tuesday.

Cann Group's license extended

Investors have been bidding up the ASX cannabis share after the company announced its GMP manufacturing licence for its Mildura facility was extended to cover additional manufacturing capabilities.

The Therapeutic Goods Administration (TGA) issued the initial license on 30 June.

Under the extension, Cann Group is now allowed to manufacture and release finished dried flower products from its Mildura facility for patient use.

Commenting on the development, Cann Group's CEO, Peter Crock, said:

This licence extension allows Cann to now manufacture patient-ready dried flower products at our Mildura facility, allowing us to quickly respond to market demands.

The Cann Group share price is up 9.6% since the announcement.

Little Green Pharma's new supply agreement

Also on Tuesday, ASX cannabis share Little Green Pharma reported on a new agreement inked by its wholly owned subsidiary, Little Green Pharma Denmark ApS.

The agreement will see Little Green Pharma supply German medicinal cannabis distributor Cannamedical Pharma GmbH with a high-THC strain product. The deal for the delivery of bulk medicinal cannabis from Denmark to Germany has a potential value of $4.5 million over two years.

This represents Little Green Pharma's fourth contract to supply medicinal cannabis to Germany.

The ASX cannabis share has gained 19.2% since the announcement.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cannabis Shares

A man in a horse head mask and suit jumps for joy on a beach.
Cannabis Shares

Could ASX cannabis shares be set for a smoking hot rebound?

ASX cannabis stocks could be set for a strong finish to 2024.

Read more »

Man in a cannabis greenhouse looks unhappy and puts his thumb down.
Cannabis Shares

Why are these 2 ASX cannabis stocks sputtering today?

Up 174% in 2023, this ASX cannabis share is giving back some more of its gains today.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Cannabis Shares

Guess which ASX cannabis share is crashing 36% following an FDA blow

Rookie mistake: This cannabis share just missed out on FDA approval for a simple reason.

Read more »

A Cronos Australia farmer and ASX cannabis shares investor stands in a field of cannabis plants and smiles at the camera
Cannabis Shares

Could ASX cannabis shares be set for a resurgence?

The world's legal and medical fraternities are taking small steps forward in the medicinal cannabis movement.

Read more »

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

This ASX cannabis stock is up 160% since June, and it has an FDA ruling coming up!

Investors are very excited about this cannabis stock.

Read more »

two men in formal business clothing closely inspect a bud from a cannabis crop.
Cannabis Shares

Why ASX cannabis shares just jumped back into the spotlight

ASX cannabis shares operate in a nation where medical marijuana is legal but recreational use remains broadly forbidden.

Read more »

A hip young man with a beard and manbun sits thoughtfully at his laptop computer in a darkened room, staring at the screen with his chin resting on his hand in thought.
Cannabis Shares

Should I buy Incannex shares while they're at multi-year lows, or steer clear?

Is the cannabis-based pharma company a bargain buy right now?

Read more »

Man in the green house growing medical cannabis
Cannabis Shares

A $3k investment in ASX cannabis stock Incannex 5 years ago is now worth $15,000. Here's why

This medicinal cannabis company has been a rare winner in its field.

Read more »