The THC Global Group Ltd (ASX: THC) share price is climbing today, on news the company is fine tuning its strategy to meet potential demand in the medicinal cannabis industry.
In early trade today, the THC Global share price surged up to 29.5 cents, before retreating its current price of 28 cents, up 1.8%.
What’s in today’s strategy update
THC Global advised that management had visited its Southport facility in southeast Queensland to review the facility’s capabilities to ramp up manufacturing. The company’s Southport facility is one of the largest pharmaceutical cannabis manufacturing facilities in the world.
THC Global also says that it has made progress in obtaining the license to allow Southport to warehouse, store and distribute S4 and S8 medicines not manufactured by the company. In Australia, S4 drugs relate to “restricted substances”, whereas S8 refers to “drugs of addiction”.
In addition, the company also applying to the Therapeutic Goods Administration (TGA) for approval of additional finished dosage forms to be produced at the Southport facility. The company currently has approval for oils, and is expected to add inhalation vapes, capsules, suppositories and ovules, and creams to its TGA licence.
Strategic shift to healthcare and pharmaceutical markets
Earlier this year, THC Global revealed several major strategic shifts in order to carve a bigger slice of the healthcare and pharmaceutical markets.
This includes a rebranding of the name THC to Epsilon Healthcare. Shareholders will be required to approve the change at an extraordinary general meeting later this month.
The company also said it was transitioning to toll manufacturing, which involves contract manufacturing of high value pharmaceuticals for third parties.
It recently announced the launch of the Medimar platform, which was designed as an end-to-end e-commerce vehicle for medicinal cannabis in Australia, using the Southport facility as a distribution hub.
Recent landmark rulings on cannabis
The medicinal cannabis industry has recently been boosted by landmark rulings in the United States, as well as at the United Nations (UN).
Last week, the US House of Representatives passed a bill to decriminalise cannabis, clearing the way to erase non-violent federal marijuana convictions. That vote followed an earlier ruling at the UN, which said that cannabis would now be reclassified as a Schedule I substance – the least restrictive drug classification.
About the THC Global share price
The THC Global share price has lost 29% in 2020, and its current share price is still a long way off from the 52-week high of 46 cents achieved in June this year.
The company commands a market cap of $49 million.
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Motley Fool contributor Eddy Sunarto 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 Bruce Jackson.
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