AusCann’s share price has been declining over the last six months, despite increasing talks of Canada’s full legalisation of the recreational use of cannabis.
In fact, this may have something to with the reason why.
When Canada legalises cannabis completely, it will mean its pledge to follow existing drug-control conventions set by the UN will become nullified.
Shares of AusCann Group Holdings Ltd [ASX:AC8] are currently trading at $0.875 per share.
Why legalisation could hurt Auscann’s share price
Earlier this month, Auscann announced its online education courses as part of its Medical Outreach Program. Its aim is to help health professionals make informed decisions about the use and implementation of medical cannabis.
The program was developed with the assistance of Auscann’s chief medical adviser, Dr Danial Schecter. He has great experience in Canada’s medical cannabis market, as well as his own cannabinoid medical clinics.
Auscann’s chairman, Dr Mal Washer had this to say:
‘It is essential that Australian doctors are informed about the endocannabinoid system and cannabinoid therapeutics so that they can make informed decisions regarding treatment possibilities. Until it becomes part of the medical syllabus, there is a need to provide accessible, referenced, objective information about cannabinoid medicines that doctors and other health professionals can draw upon to inform their thinking’.
Despite this, Auscann’s share price has been consistently falling. And while the recent global sell off wouldn’t have helped things, we have seen this uninterrupted decrease for much of the year.
Now back to Canada’s legalisation, this could hurt Auscann because in attempts to build operations and educate the medical community, it could potentially limit who needs or seeks this advice.
What Auscann’s can look forward to
With the recreational use of cannabis set to be legalised in Canada very soon, the outlook of AusCann isn’t as certain as one might expect.
In other news, AusCann’s Chilean DayaCann also entered a joint venture with Canadian listed medical cannabis company Khiron Life Sciences Corp, signing a non-binding MoU.
Here, they will collaborate to provide new alternatives of medicinal cannabis to patients in Chile along with those offered by DayaCann and Fundacion.
This could be good for AusCann’s share price, as it will expand DayaCann’s reach in Chile, as well as give the project wider access to the Latin American market.
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