Will Medical Marijuana Take Biotech Stocks To A New High?

WINDSOR, ON / ACCESSWIRE / June 22, 2016 / If marijuana brings words like smoke, pot, weed and grass to your mind, it’s time to change that picture to medicine, cure and relief. For the medical marijuana industry, what comes to mind are words like high sales, profit growth potential and stock market catalyst.

Marijuana has been used since the beginning of civilization; the first written record of the use of cannabis dates back to 2727 B.C. The ancient Chinese, Indian, Greek and Roman civilizations used cannabis for pain relief, indigestion and rheumatism, among other medical purposes. Over the centuries, cannabis became notorious as an illicit drug, and it is only in the last 50 years that modern medicine has recognized its value in healing. Research is ongoing on the use of marijuana to ease chronic or severe pain, seizures, muscle spasms, certain aspects of multiple sclerosis, nausea from chemotherapy and weight loss caused by chronic illnesses such as HIV or nerve pain.

The Cannabis Industry has Huge Potential

The cannabis industry is large and growing. More than 25 million Americans are already eligible to buy medical marijuana. The use of marijuana for medical purposes is permitted in 23 states and the District of Columbia. Sales of marijuana touched $5.4 billion in 2015; and this number is expected to surge to more than $6.7 billion in 2016, and explode to almost six times that number to $35 billion by 2020. So, we’re talking about a 600% increase in 4 years. Which other industry affords that rate of growth?

Could Another Surge in Cannabis Stocks be on its Way?

The medical marijuana industry has just received a major boost! In March 2016, GW Pharmaceuticals plc (NASDAQ: GWPH) announced that its cannabis-derived epilepsy drug Epidiolex achieved the primary endpoint of a significant reduction in convulsive seizures in the treatment’s first pivotal Phase III study. GW Pharma also has another cannabis-based anti-seizure drug called Sativex.

The primary endpoint was achieved with high statistical significance showing that Epidiolex reduces convulsive seizures in children suffering from Dravet syndrome, a rare and severe form of epilepsy that currently has no FDA-approved treatments.

This is breaking news for the medical industry and is expected to boost shares of biotech companies that have been conducting CBD-related research. And 22nd Century Group Inc. (NYSE MKT: XXII) could be the next outperformer. The company is engaged in the R&D, licensing, manufacturing, and worldwide sales and distribution of innovative and effective patented products. The company’s proprietary genetic engineering technology and plant breeding expertise hold great promise for the medical marijuana industry.

22nd Century has recently signed a strategic partnership with Anandia Labs, a leading player in Canada’s cannabis market. The new cannabis research collaboration – where 22nd Century holds exclusive rights in the U.S. to the genes required for cannabinoid production in the cannabis plant – holds the promise of lucrative commercialization opportunities. Through its innovative research, the Company intends to cost-effectively produce commercial quantities of marijuana-based cannabinoids – including CBD and CBC – that show great promise in treating neurological disorders and other medical diseases. 22nd Century has also opened its own laboratories in New York and it continues with its research collaborations with major universities.

While other cannabis related stocks will benefit from the latest development in convulsive seizures, 22nd Century is the only company that has the ability to upregulate and downregulate cannabinoidsfor the production of unique cannabis plant varieties for the medical marijuana industry. In fact, it is the only company that has patents for the genes that completely eliminate THC in plants, and THC needs to be eliminated in purely medical marijuana varietals and in purely commercial hemp varieties of the plant.

While 22nd Century’s shares closed trading on June 21st at $0.83, analysts have projected a jump in the price to $4.50 in less than a year. That’s a whopping 440% increase!

How are analysts so confident of a surge in 22nd Century’s shares? That’s because historically marijuana shares have skyrocketed on news of advancements in R&D.

Cannabis Stimulates the Stock Market

With thousands of scientists and hundreds of organizations and companies investing in R&D, the cannabis industry has received a great fillip in the past two decades. Stocks of companies associated with medical marijuana tend to spike whenever there is a breakthrough in research. Some stocks soar with the boost in optimism.

Let’s have a look at the last uptrend. In August 2013, the US Department of Justice passed a memo allowing individual states to legalize and regulate marijuana sales. While states were getting ready to legalize the recreational and medical use of cannabis, scientific research had started highlighting its curative properties.

In 2010, GW Pharmaceuticals plc (NASDAQ: GWPH) received approval in the UK for Sativex, a mouth spray that contains two cannabinoids: THC (delta-9-tetrahydrocannabinol) and CBD (cannabidiol). This made Sativex the world’s first cannabis-based prescription medicine. On April 10, 2013, the status moved to Schedule 4, which means that controlled drug prescription requirements and safe custody requirements were no longer applicable. In March 2016 as described above, GW Pharma also received approval for its cannabis-derived epilepsy drug, Epidiolex.

Continued scientific study of cannabinoids, the chemicals in marijuana, led the FDA to approve two medications that contained cannabinoid chemicals in pill form. This was a huge breakthrough.

Against the backdrop of good news and expectations of steep sales growth in the cannabis industry, shares responded positively. The stocks that recorded substantial gains in 2014, making early investors jump for joy, included:

United Cannabis (OTCBB: CNAB) – Shares surged 1,025%. This means that if an investor had bought shares for merely $1,000 in 2013, he would have converted that to $11,250 in less than a year! The company was founded to advance the use of cannabinoids in medicine through research, product development and education. It has established affiliate relationships with Harborside and Prana Bio Nutrient Medicinals, among others.

Cannabis Sativa Inc (OTCMKTS: CBDS) – Shares spiked 969%. The company is engaged in the R&D and licensing of natural cannabis products, including cannabis formulas, edibles, topicals, strains, recipes and delivery systems.

CannaVEST Corp (OTCMKTS: CANV) – Shares climbed 113%. The company is a manufacturer and distributor of cannabidiol-based products. It is focused on the procurement and wholesale of cannabidiol; and the development, marketing and sale of end-consumer products containing CBD.

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