With all the progress that cannabis legislation has made, investors are looking into profiting from a piece of the cannabis pie. Dispensaries are opening and currently operating in states that have legalized cannabis use in some form. Cannabis use for medical or recreational purposes is legal in 26 states and the District of Columbia.
Here are a few companies in which many investors are sinking their monetary teeth.
Insys Therapeutics (NASDAQ:INSY) had its cannabis-based drug, Syndros, approved by the Food and Drug Administration (FDA) last year. U.S. Drug Enforcement Agency (DEA) has not scheduled Syndros under the Controlled Substances Act yet, nonetheless. Insys stock took a 30 percent dip in March.
Insys had to file for an extension to submit earning results to the Securities and Exchange Commission (SEC) to allow its board of directors’ audit committee to perform an extensive internal review. The company has stated that its earnings numbers (net revenue and pre-tax income) are only off by $5 million.
As the company states that this is a small issue that can quickly be corrected, Insys remains a promising company in which to invest.
Cannabis distributor, Medical Marijuana Inc. (NASDAQOTH:MJNA), is also subject to dips and spikes based on how likely the Trump administration will enforce federal laws against cannabis use.
Attorney General Jeff Sessions has explicitly stated his distaste for cannabis use. Mr. Sessions told a crowd of law enforcement officials that it was just as dangerous as heroin. However, President Trump’s Press Secretary, Sean Spicer, has reaffirmed the White House’s support for medical use of cannabis, just as Republican presidential candidate Trump supported it throughout the campaign trail.
Thus for the four years of Trump’s administration, this stock could be headed for lots of volatility. However, as more people are using cannabis, studies substantiate its medical effectiveness, and more states introduce bills to legalize cannabis, MJNA, one of the biggest cannabis distributors in the country is a great long-term buy.
As peer-reviewed studies find the cannabis’s effectiveness in treating depression, pain, and other ailments, GW Pharmaceuticals (NASDAQ:GWPH) finds itself in a promising spot. GWPH will not be as susceptible to erratic market moves each time White House representatives make remarks on cannabis enforcement. It solely develops a product for medicinal purposes; however, its plant-derived cannabidiol (CBD), Epidiolex, is still awaiting FDA approval. It is very likely that Epidiolex is approved based on recent research findings asserting its effectiveness.
Our best recommendation in this environment is Insys. Experts predict Insys will sell $200 million of Syndros each year. Doctors regularly prescribe dronabinol to treat anorexia for AIDS patients, and cancer patients undergoing chemotherapy. Syndros, dronabinol in liquid form, is a lot easier to ingest, so it’s very likely that patients will use more of the drug.
As long as Insys’ internal audit does not reveal anything too serious the stock is set to recoup its losses expeditiously. Investors should buy the stock now as it dropped after the SEC granted the extension. The scheduling of the drug by the DEA is widely expected to work for the stock.