How do i invest in weed stocks
Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. This exceptional year-over-year revenue increase is the result of organic growth within legal U. Last year alone, residents in four states voted to legalize recreational marijuana, while five new states legalized access to medical cannabis.
As for marijuana stocks, they've been soaring. Yet in spite of the legal challenges facing the marijuana industry, some marijuana stocks have truly excelled. Cannabinoid-based drug developer GW Pharmaceuticals NASDAQ: Its juicy market cap is a reflection of the phase 3 success of cannibidiol-based drug Epidiolex as a treatment for two types of rare childhood-onset epilepsy known as Lennox-Gastaut syndrome and Dravet syndrome. With Epidiolex passing its pivotal trials with flying colors, there's a decent chance it'll be approved by the U.
Food and Drug Administration FDA. Wall Street is projecting healthy recurring profits for GW Pharmaceuticals by Canadian-based Canopy Growth Corp. Canopy Growth produces and sells medical cannabis in Canada, and in recent years it's been rapidly expanding its production capacity via acquisitions.
Aside from the deal giving Canopy Growth access to almost half of Canada's medical marijuana patients, it also boosted total growing capacity to , square feet and six licensed facilities.
With Canada closer than ever to passing legislation that could legalize recreational pot, Canopy Growth's recent capacity upgrades could prove exceptionally profitable for the company.
INSY isn't there anymore, but it was once a billion-dollar pot stock. Insys isn't entirely a marijuana stock in the traditional sense, because essentially all of its current revenue comes from sublingual cancer pain medicine Subsys, which has nothing to do with marijuana.
However, the FDA approved Syndros, a dronabinol solution that is the pharmaceutical version of tetrahydrocannabinol THC , the psychoactive component of cannabis, as a treatment for chemotherapy-induced nausea and vomiting and anorexia associated with AIDS this past summer.
APHQF , which sells medical cannabis products online and over the phone, isn't too far from becoming the next billion-dollar pot stock. Working in Aphria's favor is the fact that the company has been profitable in five straight quarters very few pot stocks are profitable at the moment , and that it's undertaking a pretty substantial organic business expansion known as Phase IV.
Aphria also stands to benefit in a big way if the Canadian government chooses to legalize recreational marijuana.
Prime Minister Justin Trudeau recently submitted a bill to do just that, with the expectation that recreational weed would be legal in our neighbor to the North by sometime in With Aphria's Phase IV expansion expected to take about a year, by the time it's completed Aphria may have a brand new market of customers on the recreational side to satisfy.
Another Canadian producer and retailer of medical cannabis is Aurora Cannabis NASDAQOTH: Aphria and Aurora Cannabis are competitors that are rapidly expanding their production capacity, so it's not really a shock that both have very similar valuations. Aurora Cannabis' major project is Aurora Sky, which could be the most technologically advanced and automated growing facility in the world when completed.
The company, even after acquiring a 40, square foot facility in Quebec, doesn't have , square feet of growing capacity at the moment, and it's currently losing money on a quarterly basis. But when Aurora Sky is complete, the company will have added , square feet of grow capacity. Among biotech stocks, Cara Therapeutics NASDAQ: CARA has a shot at becoming the next billion-dollar pot stock.
Investing In Marijuana Stocks? Don't Let Your Money Go Up In Smoke | Benzinga
However, it's important for investors to understand that Cara's situation is a lot like Insys', in that just a portion of its pipeline is dependent on cannabinoid-based drugs. Cara is currently a developmental-stage drug developer, and kappa opioid receptor agonist KORA CR is its lead drug.
Marijuana Stocks: How to Invest in Marijuana Today
KORAs typically don't cross the blood-brain barrier like opioid medicines, meaning they may offer pain relief without the central nervous system side effects associated with opioids. CR is being targeted at both pruritis itching and pain; but make no mistake, pain is the far bigger fish in Cara's sea.
Cara Therapeutics' marijuana ties relate to its preclinical development of CR, a CB receptor agonist.
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Preclinical studies in animals suggest it could be useful in treating pain and replacing opioid therapies, but it's a very long way away from pharmacy shelves at this point. Finally, clinical-stage drug developer Corbus Pharmaceuticals NASDAQ: Corbus' entire pipeline is dependent on just one drug, anabasum, which is being tested in four indications: Nearly all of the company's current valuation lies with the aforementioned cystic fibrosis clinical development.
There are multiple types of genetic CF variations and there aren't too many treatment options available, so any successful CF treatment could rake in a lot of profit for a drug developer. Recently, Corbus announced what it deemed to be positive phase 2 results in its CF study; however, forced expiratory volume in one second FEV1 remained stable in the reported results.
Generally, CF drugs would be expected to improve FEV1 in CF patients, but that didn't happen here, leaving anabasum's future somewhat cloudy in the eyes of Wall Street. So which marijuana stock has the best shot at becoming the next billion-dollar pot stock? In theory, Corbus has the most potential if anabasum is successful in pivotal-stage trials in cystic fibrosis, with Cara also having a decent shot should CR succeed in pain studies.
On the flipside, these stocks also carry a ton of risk being so intricately tied to a single drug or indication. My guess is Aphria is the next marijuana stock that'll boast a billion-dollar price tag. Sean Williams has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. A Fool since , and a graduate from UC San Diego with a B.
You'll often find him writing about Obamacare, marijuana, drug and device development, Social Security, taxes, retirement issues and general macroeconomic topics of interest. Skip to main content The Motley Fool Fool.
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