Australian Cannabis Index | New York and New Jersey Face Potential Pot Shortage

Cannabis producers are now well-positioned to capitalize on this supply shortfall, which is only expected to worsen once the Big Apple's nascent recreational market begins to build momentum. 

The outlook of the the 'Horizons Marijuana Life Sciences Index ETF' (HMMJ) staged a minor comeback last week—showing a 25.13% gain after suffering a steep decline earlier this month—while news broke that New York and New Jersey may be facing a cannabis shortage.

According to a recent New York Times report, over the last twelve months a serious supply gap has begun afflicting both states after initially being kickstarted by the arrival of the COVID-19 pandemic.

There's a tidal wave of demand coming. It's actually monstrous, with no drop off. I would be a fool not to be making the product. There's not a lot of inventory sitting around. It's not likely there's going to be enough supply.Green Thumb Industries Founder, CEO Ben Kovler

This caused demand to skyrocket—leaving many dispensaries with empty shelves—despite attempts to ramp up the state's cultivation efforts.

As a result, some cannabis producers are now well-positioned to capitalize on this supply shortfall, which is only expected to worsen once the Big Apple's nascent recreational market begins to build momentum. 

"Where are New Yorkers supposed to buy pot? These are just—no pun intended—these are growing pains. And the people that can navigate the growing pains, both with patience, intelligence, and capital, they could come out in the next 3-5 years being pretty successful. But it's going to be really hard to do," New York Cannabis Growers and Processors Association President Allan Gandelman said.

It is a new industry and is going to have a ton of regulations and bottlenecks that, at times, we have regulations that actually are conflicting with each other, and we don't know which ones are the right one, and who's going to follow what and who's doing enforcement."

Meanwhile, the performance of the Australian Cannabis Index continued its month-long downward spiral—falling to -18.69% on the six-month performance chart—while the S&P 500 and Australia's All Ordinaries were up by 16.82% and 7.8%, respectively.

Keeping this in mind, let's examine some of the ASX-listed shares that drove the market forward last week.


Medlab Clinical

The Australian pharmaceutical developer, Medlab Clinical (ASX:MDC), saw its share price climb to 0.20 last week, after the company announced that its Phase III NanaBis clinical trial will employ a synthetic cannabinoid formulation.

This will allow for the industrial-scale production of NanaBis at the highest quality and consistency possible, as botanical cannabinoid extracts possess "well-documented purity issues" due to the nature of agricultural cultivation.

Our clinical work over the past year has recently revealed a synthetic formulation will allow us to more closely control product development variables that could otherwise impact the manufacture and delivery of a pharmaceutical product at scale over a botanical formulation.Medlab Clinical CEO, Dr Sean Hall

This decision was made based upon feedback from a number of regulators—including the US Food and Drug Administration (FDA)—which suggested that synthetic pharmaceutical-grade cannabinoids would be preferential to an organic formulation, as it will provide greater product control across every step of the manufacturing process.

This is great news, as the data surrounding NanaBis suggests that it functions as a fast-acting viable alternative to opioids, which helps to improve both pain management and the patient's quality of life.

The company believes that by pursuing this avenue they can address a serious unmet need within the healthcare market, as growing cancer survival rates means there is a considerable demand for novel approaches to mitigating chronic pain in survivors.  

To aid this, the company is conducting a Phase III clinical trial—which will target 360 patients with cancer bone pain—to demonstrate that individuals treated with NanaBis have a higher response rate after six weeks compared to patients in the placebo group

"The company would refile its IND to reflect the new formulation which would deliver improved control over costs, certainty of supply, higher levels of purity, manufacturing, and a well-established regulatory pathway," Medlab Clinical CEO Dr Sean Hall said.

"We have recently produced our first batch of synthetic CBD and THC. Synthetic CBD now has a US FDA recognised Drug Master File and Medlab is working to submit a Drug Master File to the FDA for a 100 per cent synthetic THC known as a neat dronabinol."

Disclaimer: Past performance is not an indicator of future performance.

Botanix Pharmaceuticals

Last week the clinical dermatology and antimicrobial company, Botanix Pharmaceuticals (ASX:BOT), announced positive results from a small pilot study of its BTX 1204A formulation in canines with atopic dermatitis.

Data from the trial has demonstrated that a new higher dose formulation of synthetic CBD showed significant reductions on average in both the ESP and CADESI-04 scores—while also reducing pruritus—over the course of the 28-day treatment period.

We are very encouraged that we are seeing early positive efficacy signals for BTX 1204A in canines with atopic dermatitis. These results, provide further support for our conclusion that drug dose and formulation design is critically important for synthetic cannabidiol – higher doses and the redesigned formulation successfully used in the BTX 1801 supports further exploration in atopic dermatitis.Botanix Pharmaceuticals President and Executive Chairman, Vince Ippolito

Although this trial remained a relatively small study, the company has confirmed that the results are encouraging enough to warrant an expansion of the program into a larger proof of concept canine study.

This is currently planned for commencement in the second quarter of 2021 and if successful outcomes are achieved then they will be used to support further partnering opportunities for animal health.

"We are now in advance stages in planning to complete a larger BTX 1204A proof of concept canine study in Australia, with the primary objective to confirm and expand our data for safety and efficacy," Botanix Pharmaceuticals President Vince Ippolito said.

This may eventually be expanded further to human testing, as there is a significant unmet need for safe, topically applied therapeutics to treat atopic dermatitis.

In the US, up to 31.6 million people have a form of the disease, while 1 in 10 people will develop symptoms during their lifetime.

"Atopic dermatitis in canines and humans is clinically and immunologically quite similarii, with both species sharing similar triggers and itch symptomology which cause longer term skin structure challenges," former Chief Medical Officer for Medicis Dr Ira Lawrence said.

"Canine models are increasingly being used as valuable and effective screening tools for new therapeutic development, including dose ranging and safety assessments."

Disclaimer: Past performance is not an indicator of future performance.

MGC Pharma

MGC Pharmaceuticals (ASX:MXC) announced the successful submission of a patent application for its drug formulation, CimetrA, to the Slovenian Intellectual Property Office (SIPO), which was accepted earlier this month.

The patent application was accepted by the Slovenian Intellectual Property Office earlier this month, which will give the MGC Pharma priority when filing patents for CimetrA in additional jurisdictions.

We are delighted that the SIPO recognises the unique formulation of CimetrA, something we believe will be transformational in the treatment of COVID 19 as well as numerous other conditions. The submission of this patent application is an important next step in bringing CimetrA to market in multiple jurisdictions and ultimately treating people and patients on a global scale whilst Phase III trials for the IMP continue.MGC Pharma Co-founder and Managing Director, Roby Zomer

The company currently expects the patent to be approved and issued within the next 12 months, while a further trial focused on determining the safety profile of CannEpil has also been approved for launch in Australia.

Additionally, all three of the company's current clinical trials are well funded—as a result of its IPO fundraising activities prior to listing on the LSE, which yielded more than £6.5 million—while phase III trials for CimetrA are expected to begin shortly.

The company confirmed that it elected to advance the clinical development program for CimetrA as an Investigational Medicinal Product (IMP) to better demonstrate the drug's efficacy and pharmacokinetic treatment profile in relation to different COVID-19 variants.

More broadly, MGC Pharma has also stated that it believes the successful approval of this patent will have significant implications for the wider pharmaceutical industry, by both helping to increase general drug efficiency and as the treatment options for those dealing with inflammation and cytokine over-production experienced by coronavirus patients.

"The submission of this patent application is an important next step in bringing CimetrA to market in multiple jurisdictions, and ultimately treating people and patients on a global scale whilst Phase III trials for the IMP continue," MGC Pharma Managing Director Roby Zomer said.

Disclaimer: Past performance is not an indicator of future performance.

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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.