Marijuana News Today
And there we have it. The marijuana news today sees “Epidiolex,” the first-ever cannabis-derived medicine approved by the Food & Drug Administration (FDA), hit shelves across the U.S. today.
This is a huge milestone not only for GW Pharmaceuticals PLC (NASDAQ:GWPH), the maker of the drug, but also for drug policy in general within the U.S. (Source: “Call It Reefer Magic? FDA-Approved Cannabis-Based Drug Epidiolex Now for Sale in All 50 States,” Fortune, November 1, 2018.)
You see, marijuana is classified by the Drug Enforcement Administration (DEA) as a Schedule I narcotic, meaning that it has no beneficial health effects. By approving Epidiolex, the FDA directly contravened that (provably false) assertion.
With that discrepancy, the FDA was forced to reclassify cannabis…sort of.
Instead of removing marijuana from the Schedule I designation that applies to drugs like heroin, the FDA instead reclassified cannabidiol (CBD) as a Schedule V drug, the lowest possible.
It’s a loophole that allows the DEA to keep marijuana as stringently prohibited as possible while also allowing a drug like Epidiolex on the market.
Epidiolex is made from plants that are grown specifically to have a high yield of CBD while showing minuscule to no trace of tetrahydrocannabinol (THC), the substance within cannabis that gets a person high.
Legal workaround notwithstanding, Epidiolex is a huge push forward for marijuana legalization in the U.S.
As we’ve seen in countless states in the Union before, medical marijuana is typically a direct precedent for recreational marijuana legalization. This makes perfect sense as citizens begin to realize that cannabis isn’t the poison it’s been made out to be for decades.
While we’re still a few years away from a concerted marijuana legalization push in the U.S., Epidiolex represents a huge first step toward that ultimate goal and the drug’s presence on store shelves across the U.S. only helps to further that process along.
What we’re looking for now is more medical marijuana to begin hitting the U.S. marketplace, forcing the DEA to continuously reconsider its position and put the onus on the federal government to make the process smoother and simpler in order to have the best treatments made available to its citizens.
The final push for marijuana legalization is going to come by way of an act of Congress. These significant gains help move the goal post forward and keep the pressure on politicians to enact the will of the people, which polls show to be overwhelmingly in favor of legalization.
Seeing as Epidiolex featured prominently in the marijuana news today, why not examine GWPH stock and its near-term outlook?
The key thing to remember about GWPH stock is that, while it operates in the marijuana space, it is much more a pharmaceutical company than a typical marijuana company.
What I mean by this is that the GWPH stock chart often follows a cycle associated more so with Big Pharma than marijuana. This cycle is characterized by long and arduous testing and approval procedures that more often than not determine the fate of the stock.
This is a process fraught with challenges and pitfalls. When a drug is approved, the stock rises significantly. When a drug fails, however, the results are calamitous.
So playing GWPH stock is a much different beast than the traditional marijuana stock market, which is primarily news-driven in its performance.
Having said all that, GWPH stock may be a wiser choice as the correction sets in, setting many marijuana stocks back a fair bit. GWPH stock is less susceptible to that pullback due to its focus on the medicinal side of marijuana.
The company has less growth potential overall compared to other pot stocks, but may provide some steady gains—or at least mitigated losses—over the next few weeks.
GWPH stock also rose strongly on the back of the Epidiolex approval, rising about eight percent over the past five days.
In what is all the rage now in the marijuana market, another pot stock joins the New York Stock Exchange (NYSE): Aphria Inc (NYSE:APHA).
APHA stock is now officially on the NYSE and, unfortunately, the timing couldn’t have been worse.
Much like Aurora Cannabis Inc (NYSE:ACB) before it, changing over to the NYSE in the midst of a correction is going to impede APHA stock’s progress.
What should have been a boom time in the stock’s movement is instead going to be heavily mitigated—if not entirely erased—by the current drawback in the marijuana industry.
We can see that in today’s movement; Aphria stock is down about three percent, lower than most other marijuana companies in today’s trading.
Over the past five days, APHA stock is down about two percent, which is hardly the exciting rush marijuana bulls wanted to see out of the company.
While the move to the NYSE will pay off down the line, I don’t expect the listing to have a significant positive impact while we’re mired in this correction.
GWPH & APHA Stock Performances
The GWPH stock (black line) and APHA stock (blue line) performances from the past week are seen in the chart below:
Chart courtesy of StockCharts.com
The push for marijuana legalization in the U.S. continues to move forward and bring us closer to the inevitable. The Epidiolex approval is another step toward that goal.
The marijuana news today shows us that America is softening on marijuana, if at a slower pace than we’d like. Still, progress is being made. For marijuana investors, there is no better news than that.