$GWPH, $INSY, $CARA, $MON, $ADM
Marijuana legalization in the USA has brought keen interest among investors seeking to profit from a growing and very valuable cash crop.
The states of California, Nevada, Massachusetts, Maine, Florida, North Dakota, Arkansas and Montana have approved measures to allow the Medical and/or Recreational use of cannabis.
For now the drug is still illegal under federal law, presenting a risk that investors need to consider before investing in the growing industry.
Investor concern means than some stocks of companies that are directly and/or indirectly related to marijuana are currently undervalued in comparison with their potential.
But that makes them possible acquisition targets.
GW Pharmaceuticals (NASDAQ:GWPH), Insys Therapeutics (NASDAQ:INSY), and Cara Therapeutics (NASDAQ:CARA) are researching therapeutic effects of cannabis-derived substances.
Once a company’s product is in FDA clinical trial, the company is not allowed to sell the product while in the testing phase. After they receive FDA approval, corporations are usually looking to acquire companies with vast customer data in the market so they can get products on the shelf and begin to make money on the R&D..
I do not know if any of the companies listed above will secure FDA approval in the future or ever, but GWPH is currently in the FDA’s “Fast-Track” program.
Federal restrictions on marijuana do not stand in the way of companies that sells food supplements derived from a Key part of the Cannabis plant that does not get people high:CBD.
Cannabidiol, aka CBD, has been legal in all 50 United States for the past 7 years with no federal restrictions, paving the way for its expanded use as a health and wellness product.
Pharmaceutical grade CBD is the more medicinal part of the plant and is considered a super health food, a vast number of people in the US are buying and using it, so the data is piling up, and big pharma is looking closely at the industry leaders.
The US Food and Drug Administration (FDA) is tough on suppliers of CBD goods that contain THC for mislabeling their products and selling them on online.
There are now several companies researching the medical benefits of marijuana as a therapy for chronic pain or muscular seizures. They are seeking FDA approval to be prescribed by medical professionals.
GW Pharmaceuticals is a UK-based biotech company with an established history of researching and marketing cannabis-based drugs. The company now markets Sativex, a cannabis-derived treatment to alleviate the symptoms of muscular dystrophy, which is available in parts of Europe and Canada. GW Pharmaceuticals’ shares are +1,200% since Y 2013, is in the late stages of researching a cannabis-based epilepsy treatment.
Insys Therapeutics is a Phoenix, Arizona-based company that sells a cancer pain management drug while developing a cannabis-based drug for the treatment of epilepsy. The stock is trading significantly off its August 2016 highs.
Cara Therapeutics is a Shelton, Connecticut, BioPharmaceutical Company that develops and commercializes pain-relief drugs. The company’s treatments that do not have the same addictive properties and overdose risk as opioid-based prescriptions. The shares are trading up nearly 100% off if its July 2016 lows.
Industry analysts predict that the market for marijuana products is set to expand from about $2.7-B in Y 2018 to $8-B in Y 2020.
And overall growth in Y 2020 at $35-B as compared to $15-B for the NFL.
Big Ag: Monsanto, ConAgra, and ADM are seeing the opportunities, as is Big Tobacco.
Recall that such growth reflects the opportunities seen in technology, biotech, and social media.
The cannabis sector opportunities also presents risks as laws continue to change in response to the awakening of cannabis as an important and effective medicine.
HeffX-LTN believes that investors consider deploying some risk capital to profit from the opportunities that is arising with this lucrative cash crop.
|NASDAQ:GWPH||113.21||27 December 2016||-1.03||114.41||115.71||112.99||156,400|
|HeffX-LTN Analysis for GWPH:||Overall||Short||Intermediate||Long|
|Bearish (-0.34)||Bearish (-0.43)||Bearish (-0.40)||Neutral (-0.19)|
|NASDAQ:INSY||9.33||27 December 2016||0.12||9.32||9.59||9.27||600,500|
|HeffX-LTN Analysis for INSY:||Overall||Short||Intermediate||Long|
|Bearish (-0.42)||Bearish (-0.29)||Bearish (-0.33)||Very Bearish (-0.62)|
|NASDAQ:CARA||9.99||27 December 2016||0.02||10.06||10.47||9.7||1,191,000|
|HeffX-LTN Analysis for CARA:||Overall||Short||Intermediate||Long|
|Neutral (0.14)||Neutral (-0.23)||Bullish (0.31)||Bullish (0.35)|