前言        

In the past two years, cannabis stocks have undoubtedly become a hot spot in the stock exchange market. Investors in the cannabis industry have surged, including established companies such as Microsoft, IBM, Johnson & Johnson, and Constellation Group, as well as tens of thousands of start-ups that have invested in the cannabis gold rush.

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With the intervention of capital and the relaxation of regulatory policies, the industry has gradually moved towards diversified development, with specialized fields ranging from research-oriented companies dedicated to pharmaceutical products to consumables companies focusing on animal therapy. This article briefly summarizes the overview of the cannabis industry.

1. Purpose

Cannabis has a wide range of uses, mainly divided into industrial, medical and recreational cannabis. As a common production material, industrial hemp can be used in textiles, papermaking, food, hygiene, daily chemicals, leather, automobiles, construction, decoration, packaging and other fields. The medicinal value of cannabis has a long history.

Uses of cannabis (source: Google)

Current evidence suggests that marijuana can reduce nausea and vomiting during chemotherapy, improve the appetite of HIV/AIDS patients, and treat chronic pain and muscle cramps. The use of cannabinoids in the treatment of stroke or childhood epilepsy is still under research.

2. Degree of legalization-consumer market

As a heavily regulated industry, regulatory policies are currently the core element of understanding the cannabis industry. The policy divides the legal market from the black market on the one hand, and releases new markets on the other.

The medical value of marijuana has been highly recognized in developed countries, and the degree of legalization of medical marijuana is relatively high. It is generally concentrated in North America, South America, Europe and Oceania.

Currently, 9 states in the United States have fully legalized cannabis, and 30 states have legalized medical cannabis. In January 2018, in some states of the United States, including California, Alaska, Colorado, Maine, Massachusetts, Nevada, Oregon, and Washington, DC, the legalization of recreational marijuana was officially implemented.

Nine states where cannabis is legally grown in the United States (Source: Google)

California has jumped from the largest consumer market for medical marijuana to the largest consumer market for recreational marijuana. This aligns parts of the United States with many countries including Belgium, Brazil, Cambodia, Colombia, Czech Republic, Denmark, Greece, parts of India, Italy, Mexico, Russia, Spain, and Uruguay-all of these countries have recreational cannabis use. Be legalized or decriminalized.

Canada is the latest country to announce the legalization of recreational marijuana, and it has also become the world's largest country with full legalization of marijuana. This is also the second country in the world to fully open cannabis after Uruguay. Canadian companies are currently leading the industry, and capitalization is also a global leader.

3. The legalization process of cannabis in Australia

The process of legalizing marijuana in Australia is also a process of soaring marijuana stocks on the ASX. The medicinal use of cannabis in Australia was only approved by legislation in 2016, and it reached the legal import of medical use in 2017, and it can be exported overseas in early 2018.

On October 2016, 10, the Australian government introduced the Narcotic Drugs Regulation, which allows the cultivation and production of medical or research cannabis to be licensed to legalize cannabis cultivation and production. However, there are certain differences in the use of medical marijuana documents in different states. Victoria was the first state in Australia to introduce legislation to legalize medicinal marijuana, but other states and regions soon followed.
[Narcotic Drug Regulations] document launched by the Australian Government (Source: Google)

Australian cannabis companies received federal government approval in early 2017 to import pharmaceutical products and sell them to patients nationwide.
In March 2017, Food Standards Australia approved the cancellation of the ban on cannabis food, because the agency has concluded that as long as the active ingredient tetrahydrocannabinol (THC) in cannabis does not exceed the current maximum standard , Practical cannabis is safe for human consumption. And announced the legalization of hemp food within six months.

 

Australian residents holding cannabis food (Source: Google)

In April 2017, the Australian Federal Minister of Health and state health ministers issued a joint announcement at the Food Regulatory Forum to pass a legislation that allows industrial hemp to be safe and practical for humans, allowing food processing companies to produce edible hemp food.

 

Hemp Food (Source: Google)

Starting from November 2017, 11, hemp food has been officially legalized in Australia, and Australian people will be able to buy a variety of foods containing hemp in supermarkets and retail stores.

 

Australia and New Zealand are two countries where hemp food is legal

(Source: Google)

In early January 2018, when Federal Minister of Health Greg Hunt announced that the company could start exporting products internationally, cannabis stocks soared again. Until then, medicinal cannabis products grown and produced in Australia cannot be traded internationally. This federal government's initiative will bring Australian products to the global stage.

Australian Minister of Health (Source: Google)

Federal Minister of Health Greg Hunt said that despite the new trade regulations, the government will give priority to ensuring safe and high-quality medical cannabis supplies for Australian patients. The export approval of medicinal cannabis products will help the Australian domestic market to further grow, helping domestic manufacturers to expand the market and also help ensure the continued supply of Australian medicinal cannabis products. He expressed the hope that Australia can become the world's largest supplier of medicinal cannabis.

At present, recreational marijuana is still illegal in Australia's federal, state and territories laws.

4. Industry challenges

Under the conditions of heavy supervision, industry enterprises need to obtain corresponding licenses to carry out related businesses, which also takes up the resources of enterprises and increases the barriers to entry.

The current growth of hot medical marijuana depends on the following factors: the number of registered patients, the proportion of doctors prescribed, and the cognition of both doctors and patients. In every state and territory, patients must ask their doctor or expert about the possibility of using medicinal cannabis in their case. If the patient is eligible, the doctor can apply to the government for medicinal cannabis. Through a doctor’s prescription, patients can obtain medicinal cannabis products from a pharmacist. Doctors must first apply for approval from the Federal Therapeutic Goods Administration and the State Department of Health to prescribe unregistered cannabis products. Due to limited medical education and popularity of cannabis, some doctors are reluctant to prescribe cannabis products.

The function of drugs must take into account risks and benefits. The number of governments in the world that approve the use of cannabinoids for medical purposes is increasing. Although there are signs that some cannabinoid derivatives can be used to treat certain health conditions, the structure (active ingredients and dosage) of such drugs is not yet clear. Drug dosage form, best route of administration, or side effects.

One restriction on the export of cannabis products in Australia is whether the exporting place has legalized medical cannabis.

In addition, because companies in the industry are in different positions in the industry chain, the risks of individual stocks are not the same at a micro level.

5. ASX cannabis stocks

The following is a brief introduction to 3 ASX cannabis stocks. For more information on cannabis stocks, please clickRead originalSee "List of Cannabis Stocks on the Quotes Page of 61 Australian Stocks Information Platform" for complete information.

 AC8 

AusCann Group Holdings Ltd (ASX: AC8)It is a company based in Perth that aims to produce and provide high-quality, economical and clinically proven cannabis drugs. AC8 integrates expertise and business in all aspects of the medical cannabis value chain, starting from cultivation and production, to manufacturing and distribution of products.

AC8 stock price chart (weekly for the past 3 years)

 CAN 

CANN Group Limited (ASX: CAN)Focus on plant genetics, cannabis breeding, cultivation, extraction, analysis and production technology, and provide medical cannabis for various diseases. The company has established R&D and training facilities in Australia. On February 2017, 2, Cann was granted Australia's first medicinal cannabis research license, and on March 17, 2017, he obtained Australia's first medical cannabis cultivation license.

CAN stock price chart (weekly line in the past 1 year)

MMJ

MMJ Phytotech Limited (ASX: MMJ) It is a medical marijuana pharmaceutical company that aims to comply with medical marijuana regulations and commercialize medical marijuana and high-quality marijuana-based therapies. MMJ is headquartered in Perth, Australia. As of August 2017, MMJ holds 8 licenses issued by Health Canada, allowing it to produce medical marijuana. The company has developed and commercialized cannabis therapy and provided cannabis products for the entertainment market.

AC8 stock price chart (weekly for the past 3 years)

        Conclusion        

As an emerging industry, the industry is developing rapidly. In addition to the continuous rapid development of industrial and medical marijuana under the promotion of policy relaxation and capital, the current lobbying on the decriminalization of recreational marijuana in Australia is intensifying. Recreational marijuana is more resilient and the market prospects are more imaginative. In the future, with more capital intervention and policy changes, the cannabis industry deserves attention.

        appendix        

As of July 2018, 7, legal persons licensed to produce and supply medicinal cannabis products under the Narcotics Regulations 30 include:

 

Information Sources:The stock information in this report comes from the official website of the Australian Stock Exchange (ASX) and 61 Australian Shares Information Platform (www.61financial.com.au)

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