Shares in MedLab Clinical Limited have surged after the nutritional pharmaceutical company announced it had won NSW government approval to conduct medicinal cannabis research.

Medlab on Wednesday said the Baird government had granted it a research licence for the use of cannabis for therapeutic purposes, such as pain relief.

The company, which runs a laboratory in Sydney, said its research would "broadly encompass pain management as well as other medical conditions for varying age groups".

Medlab shares closed up one cent, or 5.41 per cent, at 19.5 cents, following the news.

In a statement, the company said it believed its patented particle delivery technology would mean smaller doses of cannabis would have to be used in patient care, resulting in less risk and fewer complications.

The government approval for Medlab, which listed on the local stock market earlier in July, comes after this week's announcement that Australia's first medicinal cannabis trial would begin in 2016 at a Newcastle hospital.

For more details, go to: http://www.heraldsun.com.au/business/breaking-news/medlab-shares-up-on-cannabis-approval/story-fnn9c0hb-1227462041501