26 May 2016

Ledger Gazette Report

Days are gone when marijuana were once considered as illegal drugs.   Today, a lot of published journal papers are coming out, showing their support for the therapeutic and health benefits of marijuana.  It is proven by different medical studies that cannabis is an effective medicine used to treat various conditions such as epilepsy, neurodegenerative diseases, nausea and vomiting, inflammatory diseases and post-traumatic stress disorders.

The weed which was once considered as a taboo has now been transformed into one of the most profitable and fast-growing industry in the market.  As a matter of fact, it has become a multi-billion dollar industry that had open doors for a lot of opportunities. This incredible growth is evident in states where the use of marijuana is legalized.


The Booming Market of Marijuana

There are already 24 states that approved the medical use of marijuana to treat various diseases. Four more states in the US approved the recreational use of Marijuana and it is expected that ten more states will follow.   No wonder, marijuana stocks becomes a hot-selling product in the market today.

The ArcView Market Research reported that last year, the cannabis market earned as much as $5.4 billion.  This year, it is expected that there will be a 25% increase in the demand which is approximately $6.7 billion!

According to the National Organization of the Reform of Marijuana Laws, 8 out of 10 Americans are in favor of the use of medical marijuana.

The Bank of America’s Merrill Lynch estimated that the industry of medical marijuana will be able to double its earning if the other state will legalize its use.

Biotech Companies that are having Flourishing Stock- Thanks to Medical Marijuana!

The massive growth of medical marijuana has benefited large pharmaceutical and biotech companies who have started investing on cannabis.  Potential investors can also benefit from their success through investing in their stocks.

AbbVie (ABBV)

AbbVie has been in the news because they recently acquired Stemcentrix and Pharmacyclics, a cancer company.  They also owned Humira, a drug used for arthritis which has reached its patent expiration. AbbVie developed the FDA Approved Marinol, a synthetic cannabinoid medication that is used to treat nausea and vomiting.  It is also a chemotherapeutic drug that helps restore hunger for patients suffering from AIDS.

Although, Marinol is not up for sales, the cannabis legalization may increase its potential revenue to the market. Analyst believed that investors will gain a 3.68% dividend yield for investing in AbbVie.

Cara Therapeutics (CARA)

Cara is a biopharmaceutical company that promotes and sells pain-relieving drugs. The company has invested on drugs that targets immune cells and in developing distinctive opioid analgesics. They also worked on marijuana based analgesics that aims to target the CB2 Receptors. The company has a promising stock price target which is expected to have an explosive jump. CARA’s median stock price target is $24.

GW Pharmaceuticals (GWPH)

This UK Based Company is licensed to cultivate marijuana plant in UK.  GW Pharmaceuticals develops a cannabis-based epilepsy drug called Epidiolex. This FDA granted drug, gain an orphan status for the treatment of a rare genetic disorder that causes epilepsy which is called tuberous sclerosis. Since this is a rare disease, GWPH got seven year marketing exclusivity rights to sell it in the US.

GW Pharmaceuticals also offers Sativex which is used for the treatment of cancer and multiple sclerosis in New Zealand and Europe. GWPH has a cash balance of $277.72 million dollar making it one of the most stable companies to invest with.

Insys Therapeutics (INSY)

The Insys Therapeutics develops Subsys, a Fentanyl Spray use for cancer pain and Syndros, a generic term for Dronabinol which is used to treat nausea and vomiting as a side-effect of chemotherapy. Despite some disappointing issues, stock analysts are still optimistic that INSY will be able to recover and deliver an annual growth of 28% over the next five years.

Why Invest in these Biotech Companies?

The exploding industry of medical marijuana has opened a lot of opportunities for Biotech companies to develop drugs that will target various diseases such as cancer and other debilitating diseases. The stock shares of these companies are rapidly increasing making them a very good opportunity to put an investment.  Analysts are confident that this trend will continue since there are still more states that are planning to approve the use of marijuana.

Works Cited

Hadland, S. E. (2015). Medical Marijuana: Review of the Science and Implications for Developmental-Behavioral Pediatric Practice. Journal of Developmental & Behavioral Pediatrics: , 115-123.

Kleber, H. D. (2012). Physicians and Medical Marijuana. Psychiatry , 564-568.