Cannabis stocks to watch on the ASX: What’s affecting share prices on the ASX?

The global cannabis space was hit hard over the summer of 2020, and the ASX bore some of the brunt as well. In fact, many marijuana stocks on the ASX have still not recovered to their pre-pandemic price.

Though Australia has an attractive investment industry, some experts have expressed hesitation about just how the medical cannabis market has grown in the country and the next steps for the industry.

Some investors have expressed concerns about the small size and youth of the market in the country. The tight government regulations are another setback that has kept some investors at bay for years.

Cronos Australia (ASX:CAU,TSX:CRON) is one of many companies in Australia that has faced setbacks in recent years, mostly due to the pandemic.

On a more positive note, the recent legalization of personal-use cannabis in the Australian Capital Territory has ushered in a new wave of opportunity for cannabis firms as well as more international investment. In addition, there has been plenty of support for legalizing cannabis in recent years, such as the Cannabis Legalization Bill introduced last year.

Patient numbers have also been up as of late. In its report from 2021, cannabis research firm FreshLeaf Analytics said the patient approval rate increased drastically, with an increase of 50 percent from Q1 to Q3 2021 alone.

Cannabis stocks worth watching in 2022

Here, INN offers a closer look at some of the cannabis stocks to watch on the ASX based on their market capitalization.

1. Cronos Australia

Market cap: AU$134.9 million

Cronos Australia is a provider of affordable medical cannabis in Australia. During its first full year on the ASX, the company developed and commercialised a portfolio of CBD brands. These products and services are available on Australian, Japanese and Hong Kong markets.

In 2021, Cronos Australia increased its stake in Cannadoc Health, acquiring approximately 73.7 percent of the medical clinic business. In December of that year, Cronos also entered an agreement to acquire 100 percent of Queensland-based medical cannabis company CDA Health.

2. EcoFibre

Market cap: AU$80.37 million

EcoFibre (ASX:EOF) is a New South Wales-based firm focusing on industrial hemp, boasting over 300 landraces of cannabis from over 25 countries globally, including hemp cultivation in the US.

EcoFibre works through multiple businesses that cover everything from high-quality hemp extracts for pharmaceutical use to hemp-based textiles to hemp food products, including hemp flour and hemp protein powder. The four parts of its business portfolio are: Ananda Hemp, Ananda Food, Hemp Black and Ananda Professional. The latter of these is the first fully legal hemp-derived CBD oil for healthcare professionals and pharmacies.

3. Botanix Pharmaceuticals

Market cap: AU$61.34 million

Clinical stage CBD company Botanix Pharmaceuticals (ASX:BDA) has a particular focus on treating skin diseases, including acne, psoriasis, dermatitis and rosacea, with a transdermal delivery system.

The company has a number of products in the pipeline, with all currently at or beyond phase 2 of studies.

4. Medlab Clinical

Market cap: AU$17.57 million

Medical research and development company Medlab Clinical (ASX:MDC) uses medical marijuana to create new bio-therapeutics medicines to address chronic ailments such as kidney disease and prediabetes.

Sean Hall, CEO of Medlab, said their work aims to service the global medical marijuana industry and help ease chronic health concerns for patients.

Medlab also owns NanoCelle, a medicine delivery platform, which allows for new products to be developed with "enhanced medical properties," according to the company. This allows them to offer near-term partnering opportunities and increase their growing portfolio.

Total revenue for its 2021 fiscal year was AU$4.4 million, a 54 percent increase from the year before.

5. Hygrovest

Market cap: AU$15.7 million

Hygrovest (ASX:HGV), based in New South Wales and formerly known as MMJ Group Holdings, is a specialist investment company holding numerous cannabis investments. Among these are healthcare products, technology, cultivation, research and more.

Two of the key cannabis stocks in its portfolio are Harvest One Cannabis (TSXV:HVT,OTCQB:HRVOF) and BevCanna Enterprises (CSE:BEV,OTCQB:BVNNF). These companies focus on health and wellness products, and cannabis-infused beverages and nutraceuticals, respectively.

Cannabis stocks to watch on the ASX: Investor takeaway

The cannabis space in Australia is still finding its footing in the global landscape, and investors have choices when it comes to which cannabis stocks to watch on the ASX market.

The rise of medical cannabis, however, does pose an interesting opportunity for investors who want to pursue diversifying plays in the at-large cannabis sector.