This Pot Company Is Leading the Way on Medical Marijuana

Aurora Cannabis Seeks to Gain From Lucrative Medical Marijuana Market
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ACB Stock, Revenue Expectations, and the UFC

Something I repeatedly remind readers about is just how much potential there is in the medical marijuana industry. One of the major aspects of that market is the potential for cannabis companies to break into the pain management field. One of the companies leading the way in that field is Aurora Cannabis Inc (NYSE:ACB).

There are two main reasons why Aurora Cannabis stock is poised for both present and future gains.

First you have ACB stock’s jump following the company’s positive revenue expectations.

Aurora is anticipating revenue, net of excise taxes, of somewhere between CA$100.0 and CA$107.0 million. That’s a huge leap from the CA$19.1 million in the previous year. The current FactSet Research Systems Inc. (NYSE:FDS) consensus is for Aurora to earn revenue of CA$112.0 million. (Source: “Aurora Cannabis rallies and lifts cannabis stocks after offering revenue guidance,MarketWatch, August 6, 2019.)

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Even if the company misses those expectations, I expect Aurora Cannabis stock to climb due to the massive earnings growth the company has experienced. The previous quarter saw Aurora recording revenue of CA$65.1 million.

Second, Aurora Cannabis Inc has partnered with the Ultimate Fighting Championship (UFC) on a research project looking into the potential of cannabidiol (CBD) as a pain management treatment for mixed martial arts (MMA) athletes. (Source: “Aurora Cannabis partners with UFC to research CBD use to manage pain in MMA athletes,” Global News, July 26, 2019.)

The research partnership between the two companies is expected to produce multiple studies on how CBD could be used to address pain and inflammation, wound-healing, and recovery for MMA athletes.

The UFC already permits CBD use among its athletes, but it wants to be on the forefront of what could be a potential breakthrough on medicinal cannabis.

“We are going to work together to change the way people think, to change the industry and to launch the first hemp-derived CBD products that are backed by scientific research,” said Aurora CEO Terry Booth. (Source: Ibid.)

“The brand-building and product development are all part of our move into the U.S., and in collaboration with UFC, and we intend to play a major role in that market.”

And the UFC is obviously enthusiastic about the potential of medical marijuana.

“It’s what we’re doing first, but I believe all sports are going to be involved in this too. And it’s massive,” said UFC president Dana White. He added, “Would you rather have these guys taking pain pills, sleeping pills?” (Source: Ibid.)

Medical Marijuana as Pain Relief

While CBD and marijuana have at times been said to have pain-relieving properties, most of that is anecdotal evidence. There has yet to be a consensus struck within the medical community concerning medicinal marijuana’s ability to relieve pain.

But that could all change very soon. With CBD being a major component of an approved prescription drug in the U.S. (“Epidiolex”), the doors are open for research to begin in earnest regarding just how effective cannabis products can be in treating pain and other ailments.

Of course, the U.S. federal prohibition on marijuana makes it very difficult to conduct full-fledged research into the medicinal properties of the drug. But even those barriers are subsiding as the push for legalization mounts in America.

There are a number of ailments that medical marijuana may prove to be very adept at treating, with pain relief being one of the more exciting opportunities.

After all, the U.S. (and much of the world) is in the grips of a devastating opioid epidemic largely caused by the overprescription of opioids for pain relief. The effects have been disastrous to individuals and communities, breeding addiction and leading to overdoses among vulnerable populations.

Considering that the opioid epidemic is something that is frequently cited by both major U.S. political parties as a major issue deserving of strong governmental intervention, the fact that medical cannabis may prove to be a silver bullet could help propel the marijuana question toward its inevitable conclusion: federal legalization.

The sooner that happens, the better it will be for investors in marijuana stocks, including ACB stock.

The medicinal marijuana market in the U.S. was already worth $11.7 billion in 2018 and it’s projected to be worth far more (almost $150.0 billion) by 2026. (Source: “Medical Marijuana Market To Reach USD 148.35 Billion By 2026 | Reports And Data,” GlobeNewswire, May 20, 2019.)

And while we don’t quite know all the facts about pot when it comes to using it as pain medication, here are two facts we do know: 1) marijuana is far less addictive and 2) it’s far less deleterious to a person’s health. Those two factors should interest many researchers to thoroughly consider marijuana as a possible pain medication.

While there are, of course, more cynical ways to view the current situation (pharmaceutical companies, after all, played a big role in opioids becoming the painkiller of choice for doctors to prescribe), ultimately marijuana as pain medication could provide both a balm to the opioid epidemic and healthy profits to the pharma companies that enter the medicinal marijuana segment.

Things like the UFC partnership with Aurora Cannabis will surely help things along. Support from massive organizations with millions of dollars in resources and a fair bit of public sway can help move issues along much faster.

Analyst Take

Medical marijuana is one of the more intriguing—if overlooked—parts of the legal cannabis industry, and Aurora Cannabis Inc is taking a lead position in this sector.

While many investors are excited, rightfully so, about the future of recreational pot, there is a ton of potential in medicinal marijuana that’s worth exploring.

Pot as pain medication is just one of the many ways that marijuana investors can profit greatly off of the cannabis revolution. All it will take is a loosening of the federal ban and an increase in research investment; the rewards could be well worth the price.