The marijuana market is growing faster than most would believe and that’s creating a lot of interest in owning marijuana stocks. However, those willing to invest their money need to choose what marijuana stocks to buy carefully.
If you have thoughts about what marijuana stocks could be top stocks in 2018, you may want to consider the catalysts ahead for GW Pharmaceuticals (NASDAQ: GWPH), Canopy Growth (TSX: WEED)(NASDAQOTH: TWMJF), and Insys Therapeutics (NASDAQ: INSY).
What Makes These Marijuana Companies Valuable?
Unlike marijuana companies that are selling medical marijuana at dispensaries in states with medical marijuana laws on the books, GW Pharmaceuticals is pursuing Food and Drug Administration approval of a marijuana-based drug for epilepsy, and a decision from the FDA could happen early in 2018.
The drug — Epidiolex — has already delivered impressive efficacy in late-stage clinical trials, and if the FDA gives it a blessing, Epidiolex can sidestep the risk that Washington, D.C., starts enforcing federal laws prohibiting marijuana sales in states that have legalized it.
The U.S. marijuana market is getting bigger as more states pass pro-pot legislation, but it faces risks because federal laws still schedule marijuana as a Class 1 drug.
Instead of risking the Trump administration’s crackdown of marijuana markets in America, it may be a better bet to look north of the border to Canada, where medical marijuana has been legal since 2001 and recreational marijuana could become legal soon.
The biggest marijuana stock in Canada is Canopy Growth, the well-funded marijuana producer behind the popular marijuana brand Tweed. Canopy Growth has over $100 million on its balance sheet, and it did $40 million in marijuana sales last fiscal year. It’s using its deep pockets and cash flow to boost grow capacity, acquire smaller competitors, and establish itself as the go-to online marketplace for legal weed when recreational marijuana gets the green light in Canada.
It’s been a rough go for Insys Therapeutics investors. The company’s been under scrutiny ever since former executives were arrested on charges of illegally marketing its opioid spray Subsys for off-label use. A revolving door in the C-suite and ongoing investigations have done little to help the company stay focused on launching its marijuana-based drug, Syndros, and developing cannabidiol drugs like Epidiolex for tough-to-treat epilepsy.
The challenges have sent shares reeling, but Insys Therapeutics has a new CEO, and he’s saying all the right things.