Why are these 2 ASX cannabis shares booming all of a sudden?

You’re likely not hearing about ASX cannabis shares as much as you used to.

It wasn’t all too long ago that most companies involved in the cultivation and sale of medicinal or recreational marijuana were booming. But as the pace of newly opening legal markets slowed, so too did investor enthusiasm for the sector.

So why are these two ASX cannabis shares booming all of a sudden?

Why are these ASX cannabis shares rocketing?

The All Ordinaries Index (ASX: XAO) is down 0.7% in late morning trade, following a retrace in US markets overnight.

But the Cann Group Ltd (ASX: CAN) share price is heading decidedly in the other direction, up 7.7%.

And fellow ASX cannabis share Little Green Pharma Ltd (ASX: LGP) is also up 7.7%.

The big gains come following some positive announcements from both companies earlier this week.

First, here’s what Cann Group reported late afternoon on Tuesday.

Cann Group’s license extended

Investors have been bidding up the ASX cannabis share after the company announced its GMP manufacturing licence for its Mildura facility was extended to cover additional manufacturing capabilities.

The Therapeutic Goods Administration (TGA) issued the initial license on 30 June.

Under the extension, Cann Group is now allowed to manufacture and release finished dried flower products from its Mildura facility for patient use.

Commenting on the development, Cann Group’s CEO, Peter Crock, said:

This licence extension allows Cann to now manufacture patient-ready dried flower products at our Mildura facility, allowing us to quickly respond to market demands.

The Cann Group share price is up 9.6% since the announcement.

Little Green Pharma’s new supply agreement

Also on Tuesday, ASX cannabis share Little Green Pharma reported on a new agreement inked by its wholly owned subsidiary, Little Green Pharma Denmark ApS.

The agreement will see Little Green Pharma supply German medicinal cannabis distributor Cannamedical Pharma GmbH with a high-THC strain product. The deal for the delivery of bulk medicinal cannabis from Denmark to Germany has a potential value of $4.5 million over two years.

This represents Little Green Pharma’s fourth contract to supply medicinal cannabis to Germany.

The ASX cannabis share has gained 19.2% since the announcement.

The post Why are these 2 ASX cannabis shares booming all of a sudden? appeared first on The Motley Fool Australia.

.

More reading

• Why is the Woodside share price in the green today?
• The Sayona Mining share price crashed 20% in September, but now…
• Here’s why the Talga share price is sinking 15% today
• The Qantas share price has just capped off a stellar first quarter. What’s next?
• A calmer day on the ASX and good news for savers. Scott Phillips on Nine’s Late News

Motley Fool contributor Bernd Struben 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.

from The Motley Fool Australia https://ift.tt/m0A4V63