Marijuana News Today
While the business headlines are still being dominated by the Canadian marijuana legalization date being set for October 17, the marijuana news today has another milestone worthy of note.
The first ever cannabis prescription drug is up for approval by the U.S. Food and Drug Administration (FDA) as early as next week. This could open the floodgates for medical marijuana stocks.
The epilepsy drug “Epidiolex” has been in development by GW Pharmaceuticals PLC-ADR (NASDAQ:GWPH) for years now, with the company exploring the medical properties of cannabis for over two decades. (Source: “Key marijuana drug approval looms as cannabis goes mainstream,” Reuters, June 21, 2018.)
The drug is derived from cannabidiol (CBD oil). Here’s a quick refresher on why the use of CBD oil in this product is so important:
First, in order to understand what is so enticing about the global CBD oil market—and therefore, cannabidiol stocks—you have to examine just how much potential there is for growth among this sub-sector of the industry.
According to recent CBD market analysis reported by Forbes, the market is forecasted to increase by 700% by 2020. Another study on CBD market growth, by Hemp Business Journal, estimates that the sector will reach $2.1 billion by 2020, which would be an enormous rise from the $202.0 million in 2016.
These estimates and other similarly rosy projections are driving a number of cannabidiol stocks to shoot through the roof.
For the medical marijuana market, the more exposure that consumers get to cannabidiol, the better it will be for CBD oil stocks, like GWPH stock.
If the FDA approves Epidiolex, we’ll likely see an early September launch date for the drug.
Analysts project the drug’s sales to exceed $1.0 billion and help combat seizures.
On top of the financial gains for medical marijuana stocks and CBD oil stocks, U.S. patients will for the first time have access to a licensed medicine to treat Dravet and Lennox-Gastaut syndromes, two rare and severe forms of epilepsy.
GWPH Stock News
Since GW Pharmaceuticals’ flagship drug is the feature of the marijuana news today, it only makes sense that we cover GWPH stock.
The stock price is up about 13% on the year, which is quite impressive, considering it had plummeted by as much as 15% just a few months ago.
Chart courtesy of StockCharts.com
It’s worth noting that GWPH stock operates in the medical marijuana market exclusively and, therefore, has been subject to a different ebb and flow compared to the pot stocks we usually cover.
For instance, the cause of the decline in the GW Pharmaceuticals stock price has more to do with the failure of one of its cannabis-derived drugs than the marijuana correction that hit in mid-January.
A few months ago, the poor results of a Phase 2a test of cannabidivarin (CBDV) put the company’s stock in a weak position for much of early 2018. CBDV is a cannabis-based molecule that GW Pharmaceuticals is evaluating for the treatment of people with focal seizures.
The CBDV Phase 2a testing showed little difference between the effects of the placebo given to the control group and the actual drug given to other participants. (Source: “GW Pharmaceuticals Announces Preliminary Results of Phase 2a Study for its Pipeline Compound GWP42006,” GW Pharmaceuticals, February 21, 2018.)
But the success of Epidiolex is what the company is truly focused on, and should the drug gain approval by the FDA and become the first prescription cannabis drug in the U.S., expect good things to come for GWPH stock.
In the meantime, the stock is going to underperform relative to other pot stocks that have enjoyed a boost from the Canadian marijuana legalization date being set.
CGC Stock News
Speaking of pot stocks enjoying a healthy boost from the recent marijuana legalization news, Canopy Growth Corp (NYSE:CGC) continues to impress.
I’m including CGC stock in the marijuana news today—and have done so every day this week, for that matter—because no other cannabis stock is quite as impressive as CGC stock is right now.
Canopy Growth stock is up nearly 17% on the week and it continues to climb. Meanwhile, it is maintaining what I would argue is the strongest market position, all without having to swing for the fences with big risky plays like other cannabis companies are accused of doing.
Stability, growth, and strong market positioning: there’s a whole lot to like about CGC stock these days.
Aphria Stock News
Despite its gains being a little lackluster compared to other marijuana stocks right now, we’re still seeing healthy growth from Aphria Inc (OTCMKTS:APHQF, TSE:APH).
Aphria stock is up about 10% on the week.
While it doesn’t quite match CGC stock levels of growth (or that of several other prominent rivals), APHQF stock’s growth still makes it quite desirable.
Of course, Aphria stock is one of the more volatile players in the industry, so investors ought to consider just how much risk they’re willing to expose themselves to.
The marijuana industry is one built on runs, both up and down, but APHQF stock tends to experience both of those to a harsher degree than, say, Canopy Growth stock.
The expansion of the legal marijuana sector around the world cannot be discounted. The industry is growing daily, as are pot stocks along with it.
CBD oil stocks are yet another intriguing subsection of what is already one of the most enticing emergent industries in the world right now.
The push for Epidiolex to be approved by the FDA will go a long way to boosting the legitimacy and value GWPH stock—and of CBD oil stocks in general.
In the meantime, broader-based marijuana stocks continue to surge on the back of the upcoming marijuana legalization in Canada.
While that surge won’t last forever, and we’ll likely see a pullback of sorts in the near future, I expect that the correction will be short-lived and that more boom times are ahead as October 17 approaches.