The federal government has granted permission for Australian companies to export medical cannabis products, a move which has seen share prices in ASX-listed cannabis rocket by as much as 50%.
AusCann in particular has witnessed a sharp gain, its share price going up by 53% within a day, effectively adding $120mn to its valuation.
Other companies to benefit include Cann Group (35% increase), Creso Pharma (20%) and Bod Australia (39%).
AusCann revealed it will now start producing cannabis products to treat chronic pain and epilepsy, among other conditions, with a view to export by late 2018.
The government may be looking towards the example set by Canada, which has seen a rapidly growing sector contribute millions to its economy in recent months.
Medical marijuana is already legal in Canada and business is booming with the industry bringing in CA$869 million in legal sales in 2016. Taking this into account, Deloitte estimates the current cannabis market has a base retail value between $4.8-$8.7bn, which would rival the size of the Canadian spirits market, which is $5bn.
In 2016 the Australian government legalised patient access to medicinal cannabis products, Victoria and New South Wales among the first territories to roll the legislation out.