At time of writing, the share price of THC Global Group Limited [ASX:THC] is up 5.81% and trading at 45 cents.
After a strong start to the year, the share price of THC Global entered a rocky patch and has largely been trading sideways since August, with a recent dip in the last week:
The latest news out of the company is that it has received permits for its growing Research and Development facility in Queensland.
THC Global’s share price reacts to news
In an important step for the company, THC Global announced today that the Office of Drug Control (ODC) had granted two Cannabis Permits to its wholly-owned subsidiary Canndeo, allowing for the cultivation and production of proprietary high CBD strains.
CBD, or cannabidiol, is a cannabinoid that does not have intoxicating effects. It is being studied for a variety of therapeutic effects and has shown promise in treatments for anxiety, insomnia, pain and paediatric epilepsy.
CEO Ken Charteris greeted the news positively, saying:
‘The receipt of these permits is a critical step in progressing our Australian farm-to-pharma strategy and confirms expectations that THC Global will be in a position to commence full-scale production in the near term as one of the only Australian companies to have production ready facilities with licensing and permitting at an advanced stage.’
What’s next for THC Global?
There are a number of things investors will be looking for from THC Global in the next two quarters.
In Q1 2019 THC Global plans to develop a medical trial and secure validation of its medicinal cannabis product from its manufacturing facility.
In Q2 2019 it will be seeking an offtake agreement for export as well as revenue generation from locally manufactured products.
The share price of a number of cannabis stocks on the ASX has suffered this year after an explosion of interest around January.
In recent news there has been a push for legalisation of cannabis in the ACT with backbencher Michael Petterson saying:
‘Cannabis legalisation is not a radical idea. There are now 10 states in the United States of America that have legalised cannabis along with Canada, South Africa and Uruguay.’
While legalisation may still be some way off, it is expected the Australian medical cannabis market may potentially be worth more than $1 billion by 2025.
For Money Morning