With the Federal government giving the green signal for exportation of cannabis based products for the first time from Australian manufacturers, AusCann Group Holdings Ltd (ASX: AC8) has moved up towards its 52-week high with a 9.4% rise on January 08, 2018.

The fully integrated pharmaceutical cannabinoid company has been on track with licensing to start Australian cultivation and manufacturing cannabinoid products in 2018.

With various levers in place, including strong partnership with Canadian company Canopy Growth Corp (the largest producer of medicinal cannabis globally), AC8 seems to be at the best position among the pot stocks to leverage from sector driven momentum. The group has got its manufacturing agreements and Therapeutic Goods Administration (TGA) approval in place (some agreements through its partners, including Tasmanian Alkaloids, producer of about 40% of the world’s opiate supply). The group finds itself to be in its light years compared to its peers with all the necessary approvals and progress at various levels. Lately, AC8’s 50:50 Chilean joint venture, DayaCann (the only licensed medicinal cannabis grower in Chile), commenced work for planting of its second medicinal cannabis crop, following the grant of its cultivation licence in November 2017, and the crop is expected to be harvested in the first half of 2018. The group now aims to develop final dose form medicines for the treatment of chronic and neuropathic pain for supply into the significant Latin American market.

Last three months have given the stock a good jump of 246% while competitor Cann Group that focuses on Australian cultivation and sale of raw medical cannabis material demonstrated a stock price rise of 193% (as at January 05, 2018).

Looking at trading scenario, the valuation now seems to be little strained and at a higher side. We maintain a “Hold” to take leverage from any other positives this year with sector driven movements across the globe, at the current price of $1.74
 

2018 Milestones (Source: Company Reports)

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