Back
3 MIN READ
Biotech stocks levered to the cannabis industry have been trading soft over the last month following the DEA’s decision not to reschedule cannabis out of its current Schedule I status.
Even though marijuana clearly has medical benefits, it remains a Schedule I substance alongside heroin, LSD, ecstasy, and bath salts under the Controlled Substances Act (CSA). According to the United States Drug Enforcement Agency, Schedule I substances have the following characteristics:
- The substance has a high potential for abuse.
- The substance has no currently accepted medical treatment use in the U.S.
- There is a lack of accepted safety for use of the substance under medical supervision.
Three Overlooked Benefits of Cannabis
Three overlooked benefits of cannabis include its potential to treat the following debilitating and deadly diseases:
- Cancer: Cannabinoids, the active components of marijuana, inhibit tumor growth in laboratory animals and also kill cancer cells. In April 2015, the National Institute on Drug Abuse (NIDA) reported that marijuana can kill certain cancer cells. The monthly publication was revised to say the following: “Recent animal studies have shown that marijuana can kill certain cancer cells and reduce the size of others. Evidence from one animal study suggests that extracts from whole-plant marijuana can shrink one of the most serious types of brain tumors. Research in mice showed that these extracts, when used with radiation, increased the cancer-killing effects of the radiation.”
- Fibromyalgia: Zynerba Pharmaceuticals (ZYNE: NASDAQ) is a specialty pharmaceutical company focused on developing and commercializing synthetic cannabinoid therapeutics formulated for transdermal delivery. Zynerba is developing two therapeutic candidates based on proprietary transdermal technologies. The company’s THC Pro-Drug Patch is a pro-drug of THC that enables transdermal delivery via a patch. Zynerba is studying ZYN001 in patients with fibromyalgia and peripheral neuropathic pain.
- Epilepsy: In mid-March, GW Pharmaceutical’s (GWPH: NASDAQ) reported positive results for the first Phase 3 Clinical study for its Epidiolex product (for the treatment of Dravet syndrome). In this study, Epidiolex achieved the primary endpoint of a significant reduction in convulsive seizures assessed over the entire treatment period compared with placebo. Epidiolex has both Orphan Drug Designation and Fast Track Designation from the FDA. The American Academy of Neurology (AAN) issued a statement saying GW’s Epidiolex product, "may show promise" in the treatment of severe epilepsy in children.
…But it still remains a Schedule I substance
Benefits can no Longer Be Ignored
The benefits of marijuana can no longer be ignored. The recent findings, NIDA’s admission, company developments, and the opinion of Dr. Sanjay Gupta and of the United States Surgeon General should be enough to reschedule marijuana and promote research into it.
Although the decision by DEA impacted stocks within the cannabis sector, we believe that this creates opportunity for investors. If you take at the performance of our favorite pharmaceutical cannabis stocks since August 8th, you will be able to see that some of the weakness is overdone.
- GW Pharmaceuticals (GWPH): Down 12%
- Zynerba Pharmaceuticals (ZYNE): Down 15.2%
- Insys Therapeutics (INSY): Down 16.9%
- Cara Therapeutics (CARA): Down 11.2%
- Medical Marijuana Inc. (MJNA): Down 12.4%
Sign up for Mushroomstocks’s Newsletter to stay up to date on opportunities within the sector!
All good -- no spamming here.
Comments