The Billion-Dollar Cannabis Bonanza — Why Big Pharma Wants In…
Editor’s Note: For the past couple of weeks, we’ve been telling investors about the major catalyst that investors need to be paying attention to as we head into the 2022 midterm elections.
I’m talking about the issue of marijuana legalization, which is on the ballot in several states in this election.
Make no mistake, this is a critical moment. As our colleague John Persinos puts it, it’s the biggest tipping point in history for canna-business. And that means investors will have a unique opportunity to profit in the coming days.
That’s why John held a special investment Town Hall on November 1, called “The Marijuana Millionaire Countdown.”
An archived version of this event is available to view for a limited time. In the meantime, we’re featuring some of John’s insights and expert analysis of this burgeoning industry.
John recently had a discussion with one of our other expert analysts over at Investing Daily, centered around the popularity of legalization efforts, the prospects for legalization on the federal level, and Big Pharma’s interest in medicinal cannabis.
Expert Interview: The Billion-Dollar Cannabis Bonanza — Why Big Pharma Wants In…
Welcome to my interview with Scott Chan, the lead analyst for Real World Investing and The Complete Investor. Scott is an expert on pinpointing the emergence of global investment “megatrends,” and with the U.S. midterm elections only a few days away, I decided that now is an opportune time to pick his mind about…marijuana.
Yes, marijuana. The mainstreaming of cannabis is one of the most profitable investment trends you’ll witness in your lifetime. On November 8, proposals to legalize weed will be on five state ballots.
First, a quick word about my colleague Scott (pictured).
Scott Chan moved from China to the U.S. with his family at the age of 10. He earned undergraduate degrees from New York University followed by an MBA degree from the Zicklin School of Business at Baruch College. Scott reads and speaks fluent Mandarin and Cantonese Chinese. My questions are in bold.
Scott, from your perspective, how popular is marijuana legalization with the American public?
Who says Americans can’t agree on anything? According to the latest polls, public support in the U.S. for the legalization of marijuana has risen to nearly 70%, including the majority of both Republicans and Democrats.
Considering the political divisions in this country, support north of 60% is quite broad. In the U.S., the use of cannabis for medical purposes is legal in 38 states. When the November 8 midterm elections are over, we’ll see pot legal in a few more states, due to ballot initiatives.
Efforts to legalize marijuana federally for medical and recreational use have stalled in Congress. What are the near-term chances of federal legalization?
Hope is not lost. The Democrat-controlled U.S. House of Representatives is friendly to the cause. The roadblock, the 50-50 Senate, is currently working on several pieces of legislation to lift restrictions against pot on the federal level.
Of course, if the GOP takes one or both chambers in the election, pot legalization will face a tougher road. But the states aren’t waiting for Uncle Sam to act. And over the long term, I’d say that the federal legalization of weed is inevitable.
No matter what your opinion on recreational use, cannabis has been clinically shown to have medical benefits. There’s big money to be had in the field of pharmaceutical cannabinoids, which are drugs derived from ingredients in marijuana. Can you suggest a case study along these lines?
Yes, I can. GW Pharmaceuticals made history in 2018 when its epilepsy drug Epidiolex became the first cannabinoid to be approved by the U.S. Food and Drug Administration (FDA).
GW Pharmaceuticals was bought out by Jazz Pharmaceuticals (NSDQ: JAZZ) last year for $7.2 billion, a pivotal deal that sent shock waves throughout the marijuana sector and triggered a wave of consolidation among pot firms.
Epidiolex generated more than $460 million in 2021 sales. It treats epileptic seizures associated with Lennox-Gastaut syndrome (LGS), Dravet syndrome (DS), and tuberous sclerosis complex (TSC).
The drug contains cannabidiol (CBD), which is a purified substance extracted from marijuana, and it was deemed safe enough by the FDA to be used by even toddlers.
LGS and DS are both epilepsy-causing genetic disorders that usually begin to show symptoms in infancy. They are very difficult to treat, but the use of Epidiolex is found to significantly reduce the frequency of seizures.
TSC is another genetic disorder. It causes non-malignant tumors to grow on the brain or other vital organs, which in turn can lead to seizures and intellectual and behavior problems and other serious health issues. Epidiolex helps manage the seizure symptoms.
What other major marijuana-related drugs occupy the pipeline?
Jazz is currently working on treating other disorders with cannabinoids, including schizophrenia and autism. For the price it paid, Jazz is certainly going to look to squeeze out more money from the GW assets.
So far, Epidiolex is the only FDA-approved drug that contains ingredients derived from marijuana, but with ongoing research, there will likely be more such drugs hitting the market in the years ahead.
Additionally, there are two FDA-approved synthetic cannabinoid drugs on the market. This means that they are human-made chemical-based drugs designed to mimic the effects of real cannabis.
There is Cesamet, owned by Bausch Health (NYSE: BHC), which treats nausea and vomiting in cancer patients caused by chemotherapy.
The second drug, Marinol, owned by Indian company Alkem Laboratories, also treats nausea and vomiting caused by chemo treatment. What’s more, it’s approved to treat anorexia and weight loss in HIV patients.
It appears that lucrative opportunities in marijuana investing lay ahead.
Oh yes. As Epidiolex shows, cannabinoids derived directly from the plant can be lucrative. It’s almost midway to $1 billion in sales a year and could very well become a blockbuster (i.e., $1 billion or more).
There are an estimated 30 late-stage clinical trials investigating cannabinoids, so over the next few years we could see an explosion of the market. Note that the most common medical use of marijuana is to manage pain, and so far there’s no approved marijuana drug for pain yet.
Thus, the marijuana market is not only about planting and supplying the plant. Derivatives products, including medicine, are poised to become billion-dollar opportunities as well. The time for investors to get aboard the “green rush” is now.
Check Out Our Marijuana Investing Town Hall…
Editor’s Note: The legalization of marijuana offers a major investment opportunity for savvy investors. According to analysts, new state markets are likely to boost U.S. legal cannabis sales to $72 billion annually on a national basis by 2030. But it’s important to do your homework before investing in cannabis stocks.
That’s where John comes in. During his special investment Town Hall, called the “Marijuana Millionaire Countdown,” John revealed the one simple marijuana trade that could dump piles of cash into your brokerage account, before the midterm votes are even counted.
An archived version of this event is available to view — but only for a limited time.