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Cannabis stocks soar more than 130% in Australia

Bloomberg Published on Fri, Mar 24, 2017 / 7:52 AM GMT+8

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LONDON (March 24): There’s a buzz in Australia’s stock market. Shares of companies involved in the cultivation, production and research of medicinal marijuana have on average soared more than 130% in Sydney this year. That’s six times higher than their peers in the US and Canada.

The surge was sparked by Australia easing restrictions on imports of cannabis to treat illnesses from epilepsy to cancer.

Australia’s nascent cannabis sector is a sliver compared to the US, where more than half of states have legalized medical uses of the plant. While that allows plenty of room for growth, companies with unproven business models and patchy cash flows remain at the mercy of regulators, according to Peak Asset Management LLC. Only Queensland allows specialist medical workers to prescribe pot-related products to people who don’t respond to conventional medicine.