Why was the Incannex share price put on ice today?

Man with his hand out the front, symbolising a trading halt.Man with his hand out the front, symbolising a trading halt.

The Incannex Healthcare Ltd (ASX: IHL) share price went nowhere on Thursday after the company requested a trading halt before the market open.

The Incannex share price was 23 cents at the close yesterday.

Let’s find out what’s happening with this ASX cannabis share.

Why is the Incannex share price at a standstill?

According to a statement, Incannex intends to conduct a “strategic institutional capital raising“.

Incannex asked the ASX to halt its share trading ahead of an official announcement explaining the detail of the raising.

Incannex shares will remain on ice until the commencement of normal trading on 5 December or upon the release of its announcement.

What’s been happening at Incannex?

Incannex develops medicinal cannabinoid pharmaceutical products.

As my Fool colleague Brooke recently noted, Incannex shares had a shocker in October.

The company entered the S&P/ASX 300 Index (ASX: XKO) in September. The following month, the Incannex share price underperformed the index by 15%. And that was despite a series of seemingly positive market updates.

In November, Incannex shares dropped another 11.5%. Ouch.

Cannabis shares are a highly volatile category of the market. One of their biggest hurdles is regulatory restrictions.

Medicinal cannabis is simply not legal in many parts of the world — including numerous states in the enormous nascent United States market.

As my Fool colleague Bernd reports, US President Joe Biden wants marijuana use legalised.

In October, he announced he would pardon everyone convicted of simple possession.

ASX cannabis shares responded to that, with Incannex shares rising 11% over two days.

Incannex performance snapshot

Incannex shares are down 65% in the year to date.

Over the past five years, they are up 1,050%.

The post Why was the Incannex share price put on ice today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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