Shares of Zelda Therapeutics Ltd [ASX:ZLD] climbed over 2% in today’s first half hour of trading. Shares are trading at $0.090 at the time of writing, a 2.27% rise for the day.
The company brings together leading researchers and clinicians in the study of medical cannabis.
What’s happened to Zelda’s medical marijuana testing?
The demand is there. That’s a sure thing.
But it seems the high experienced by many investors is finally starting to wear off. The share price has been falling since early May.
Their reason for this? Without too much in company-specific news recently, no one really knows. But it’s not unreasonable that Zelda’s gradually declining share price might come from marijuana’s continued illegal status.
The legalisation of medical cannabis is the core of the company’s market. But, as the larger recreational market is legalised in places like the US and Canada, hype has built around companies like Zelda Therapeutics. But with progress towards full legalisation lagging in Australia, some of that excitement may be wearing off.
After nine US states, and now Canada, took the initiative to legalise recreational marijuana, there’s been an outpouring of support by the public — and in strong economic results. Just look at California, recording $2 billion in cannabis sales.
With greater optimism, the same could be possible for Zelda. Health Minister Greg Hunt is already gearing Australia to be ‘potentially, the world’s number one medicinal cannabis supplier.’
Going forward with Zelda
Zelda therapeutics is working towards an alternative treatment option for brain tumours most commonly found in children, medulloblastoma.
The company recently released an update about their collaboration with Telethon Kid, which focuses on pre-clinical testing of Zelda’s compounds. They found that pure cannabis is reducing proliferation of cancer cells, creating an anti-cancer effect.
With the validation of their cell based research, moving forward the research project will be testing Zelda’s full plant extracts in the same way, and aiming to get even better results than shown in the pure cannabis testing.
While it may not come with the level of excitement of full legalisation, further proof of cannabis’ medical benefits could bring investors’ attention back to this stock.
Editor, Money Morning