Countries across the globe continue to legalize cannabis and it is only a matter of time until the U.S. gets on the bandwagon.
The biotech sector will be one of the greatest beneficiaries of legal cannabis and companies focused on this opportunity have outperformed the market over the last quarter.
A Stock to Watch
Today, Vinergy Resources (VIN: CSE) (VNNYF: OTCQB) reported a breakthrough while conducting R&D on its oral cannabinoid (CBD) delivery strips and controlled time release capsule technology.
We highlighted VIN.CN as a stock to watch after its acquisition of MJ Biopharma in mid-December and the market responded very favorably to this all-stock purchase. MJ Biopharma is a private cannabis technology company focused on manufacturing breath strips, time release capsules, extract oils, food products such as infused juices, teas, coffee and extract drinks, as well as the development of pharmaceutical grade delivery systems.
MJ Biopharma is also focused on licensing and partnering on the development of technologies and products for the medical and recreational cannabis market in Canada and abroad. The company said that the novel approach that is under development will become the basis for new products where water or saliva is the catalyst used to activate the carrier for delivery and absorption of CBD in the body.
Opportunity to Create a New Product Category
This unique approach forms the basis for a fundamentally new technology and possible new product category. The technology is called BURST due to the speed at which it can enhance the body’s absorption of various ingredients. The BURST system is built on natural botanical polymers delivering specialty processed high purity cannabinoids.
MJBiopharma CEO Kent Deuters said, “This is a great breakthrough for us and the product line we have planned. The technology can also be utilized in our time release capsules which of course will have a slower absorption rate. We think time release capsules are extremely important as they help bridge the gap in terms of familiarity with many patients who want to switch from synthetic drugs to a natural drug as a way to reduce side effects, reduce drug costs and just feel better all around.”
Two Top Picks
Two other biotech cannabis stocks we are watching are Zynerba Pharmaceuticals (ZYNE) and GW Pharmaceuticals (GWPH).
GWPH has rallied off its recent lows and we remain bullish on the company due to its deep pipeline of pharmaceutical products that are in advanced stages of FDA testing. The company has several catalysts in the back half of 2017 and we see significant upside to current levels.
ZYNE continues to remain one of our top picks in the cannabis sector as we see significant upside to current levels. The average Wall Street price target on ZYNE is north of $30 and we view the company as an acquisition candidate for any biotech company interested in the cannabis industry.
We continue to view GWPH as one of the top investment opportunities within the cannabis sector as it is the only Nasdaq traded company focused on developing treatments from the actual cannabis plant.
Unlike Zynerba Pharmaceuticals (ZYNE) which develop its treatments from synthetic cannabis, GWPH uses the actual cannabis plant and the benefits of this are reflected in its continued success in FDA trials.