Marijuana stocks are the hot things in today’s market, and rightfully so. For years medical marijuana has gained steam in the U.S., but recently recreational marijuana is also starting to spread across the nation.
Last week we took a look at companies involved in the growing aspect of marijuana, including companies like Canopy Growth (CGC), Cronos Group (CRON) and MariMed (MRMD). These companies will benefit as demand increases, but another part of the industry also has huge potential, and that is the biotech companies that are looking for more medical uses for the plant.
There are currently 33 states in the U.S. that have passed legislation for medical marijuana, and Canada has fully legalized marijuana for both recreational and medical use. Whether or not you believe marijuana should be legal on a recreational basis, it is getting harder to dispute the positive research being done on its medicinal properties.
As more medical uses are discovered, biotech companies will continue to work on new ways to deliver cannabinoid drugs to patients to help ease or cure their ailments.
Here are few biotech companies that are emerging as leaders in the sector.
GW Pharmaceuticals plc (GWPH)
GW Pharmaceuticals plc (GWHP) has the distinction of having the first medicine derived from the cannabis plant. Last year the FDA approved the company’s drug Epidiolex, which is used to treat seizure disorders, and the drug hit the market in November. The company believes the FDA’s approval for Epidiolex is the beginning of a new wave of medicines with huge potential. Marijuana medicines are very different from medical marijuana, and since it requires FDA studies and approval, it can be reimbursed by insurance companies, unlike medical marijuana. The FDA’s move will incentivize more companies to try to bring more medicines to market, and GWPH has already proven an ability to navigate the trial and testing phases successfully, putting the company in the clear lead in the sector.
Cara Therapeutics, Inc. (CARA)
Cara Therapeutics, Inc. (CARA) is a biotech company that focuses on various treatment alternatives to opioids. It is no secret that the U.S. has a major opioid crisis, so any medicines that can take the place of opioids would have a huge market, and the potential to ease the crisis that has crippled so many (it is estimated that around 30,000 people die from overdoses each year). The company has many different drugs in development that aim to take the place of opioids, and among them are cannabinoid options. Doctors are well aware of the problems created by opioid dependency, and are increasingly looking for alternatives, and if Cara is able to break through with an FDA approved cannabis drug for pain relief that can take the place of traditional opioid pain medicines the market is huge and would put Cara in the same field as the big pharmaceutical companies.
Insys Therapeutics, Inc. (INSY)
INSYS Therapeutics, Inc. (INSY) is a specialty pharmaceutical company that develops drugs and delivery systems. The company is best known for its Subsys fentanyl spray, but has moved into the marijuana sector with FDA approval of a synthetic THC drug to help chemotherapy and AIDS patients deal with nausea. The company has a solid pipeline of cannabinoid drugs targeting epileptic disorders and amphetamine addiction. Insys has a checkered history with the company paying $150 million to settle a criminal investigation into its sales and marketing of opioid drugs, but as the company puts that behind it and focuses on future medicines involving cannabinoids there is a lot of upside in the stock.
Corbus Pharmaceuticals Holdings, Inc. (CRBP)
Corbus Pharmaceuticals Holdings, Inc. (CRBP) is a marijuana biotech company with a big dream. The company hopes to become the leader in the treatment of inflammatory and fibrotic diseases. The company is currently developing Lenabasum, a drug to treat such disorders that it hopes will gain FDA approval in 2021. If the company is able to gain FDA approval for the drug and bring it to market, it would create a huge opportunity for the company and the stock would skyrocket. As a clinical stage biotech company, Corbus will always be a riskier play that the big established biotech companies, but with the risk comes big reward potential, and the company could hit it rich with Lenabasum.