Three of the Best Marijuana Pharmaceutical Stocks for 2018

marijuana pharmaceutical stocks
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Three Great Marijuana Stocks 

A delay in Canada’s proposed legalization of recreational marijuana has cast a shadow of doubt over the marijuana industry. Marijuana stocks banking on the legalization will likely stay in limbo until a final decision comes. But some of the best marijuana pharmaceutical stocks, which are much less reliant on the recreational market, may outperform in the long run. 

You see, medical marijuana is already legal in Canada. It has been for well over a decade and a half. To the south of Canada’s border, more than half of U.S. states recognize it as legal. So, marijuana companies engaged in the medical or biotechnology field are certainly safer bets than ones wagering big on the recreational market.

Take the example of the biggest players, Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED) and Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB), who are now fully focused on the recreational market. In a bid to defeat each other, they’re doling out money on expensive acquisitions and expansions.

Meanwhile, one of their close nemeses, who’s also on my list below, is playing it safe. While securing a position in the recreational market is certainly on its bucket list, it is not losing focus on its core business, which thrives on the legal medical market that’s not as threatened by the illegal black market as the recreational market. (You’ll be reading more about this company shortly.)

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So without further ado, here are the three best marijuana pharmaceutical stocks you should be watching right now.

List of Best Marijuana Pharmaceutical Stocks

1. GW Pharmaceuticals

If there’s any stock that’s a perfect cross between the two industries—marijuana and pharmaceutical—it has to be GW Pharmaceuticals PLC (NASDAQ:GWPH).

The company cultivates high-quality medical-grade cannabis strains and then uses them for manufacturing drugs.

One of its latest drug candidates, “Epidiolex,” which is awaiting approval from the Food and Drug Administration (FDA), is currently the most highly anticipated drug in the industry. Just last month, GW Pharma managed to secure five U.S. patents for the same drug.

Epidiolex, which is a treatment for conditions in epilepsy patients, has already undergone Phase 3 trials and the company has submitted the results to the FDA. All it awaits now is a green light from the regulators.

Chances are that it will be approved later this year and sales may begin by next year. Bear in mind that in terms of revenue, it is the third-largest marijuana company that’s listed on a U.S. exchange.

After reaching as high as $140.00 during the December bull market, GWPH stock is now trading at nearly the same level as a year ago. It’s the best time to add it to your watchlist and maybe place a limit order.

Chart courtesy of TradingView.com

2. AbbVie Stock

My next pick is AbbVie Inc (NYSE:ABBV), which is not a marijuana company per se since it doesn’t touch marijuana. But it is often counted as a marijuana pharmaceutical company, since its synthetic marijuana drug, “Marinol,” is one of the best-sellers.

Marinol contains synthetic tetrahydrocannabinol (THC) which gives it marijuana-like therapeutic properties. For reference, THC is the main constituent of marijuana that gives you a buzz.

The drug has been a hit with cancer patients for treating their nausea and vomiting. It has also been found to boost appetite in HIV/AIDS patients.

Spun off from the mighty Abbott Laboratories (NYSE:ABT), which is a household name, AbbVie is one top-notch pharmaceutical company. Its exposure to the budding marijuana industry is just one of the many reasons to be bullish on ABBV stock.

Despite the recent stock market slump, this stock is still up more than 40% since the last time I wrote about it, beating the broader market fourfold.

It’s the kind of “forever stock” I’d consider adding to my retirement portfolio.

Chart courtesy of TradingView.com

3. CannTrust Stock

Wait, you may be wondering why this Canadian pot grower is on my list of best marijuana pharmaceutical stocks. Well, CannTrust Holdings Inc (OTCMKTS:CNTTF, TSE:TRST) is the medical marijuana stock I mentioned in my prologue. 

While it’s not exactly a marijuana biotechnology stock like the other two, this company has a primary exposure to the medical marijuana market as it produces pharmaceutical products derived from cannabis, like oils and capsules.

CannTrust is currently my top pick out of all of Canada’s medical marijuana companies since it is one of the fastest-growing companies in terms of quarterly sales and is adding new marijuana patients at a rapid pace.

The company, which had less than 8,000 registered patients a year ago, now boasts a loyal customer base of over 40,000 patients.

But what truly gets me excited about CannTrust is the fact that it is now one of the only two top marijuana companies in Canada that are profitable. In the last two quarters, the company has managed to churn out reasonable earnings, while top players like Canopy Growth and Aurora Cannabis continue to lose money.

CNTTF stock has come a long way from being a little-known marijuana penny stock a year ago to becoming a billion-dollar marijuana unicorn in the December bull market.

Although the stock is up more than 200% in the past one year, it is now trading for nearly half of the price it reached during the bull run. Needless to say, it’s deeply marked-down.

Chart courtesy of TradingView.com

This small company may soon turn into a marijuana juggernaut, and I foresee it dethroning one of the top four players. Keep a close eye on this top marijuana stock. You may be positively surprised.

Analyst Take

While it seems certain to me that Canada’s Liberal government will succeed in defeating the Conservative opposition on the issue of marijuana legalization, an inkling of uncertainty will remain in the hearts of fidgety investors until they see the marijuana bill go into effect.

So, while this air of uncertainty continues to shroud most marijuana stocks, investors may consider the three best marijuana pharmaceutical stocks I’ve mentioned above, which may smoothly weather the momentary upheavals and outperform the market in the long run.