A brand-new market created before our eyes isn’t something you see every day — but that’s exactly what happened in 2016.
On Nov. 8, eight states around the country voted to legalize, either recreationally or medicinally, marijuana.
Today, legalization movements have gained more traction than they’ve had in decades. Marijuana is now legal in more places than it has been since the first anti-marijuana laws started appearing in the early 1900s.
The potential for medical use has led a number of states to decriminalize or legalize marijuana for medical purposes — although marijuana is still illegal at the federal level. This remains a major impediment to the use of the substance or to the use of drugs derived from it.
But the changes that have already occurred will create the opportunity to earn massive profits for investors who “get in ahead” of the creation of this market. Its medical applications provide marijuana legalization compelling investment potential. More on that in a minute.
I don’t want to get into the morality of legalizing marijuana today. It’s a controversial subject with strong opinions on each side.
The main controversy surrounding marijuana is of course that cannabis contains psychoactive chemicals — essentially drugs that affect the brain in some way. The most prevalent is tetrahydrocannabinol (THC), but the plant can contain up to 65 similar chemicals, collectively known as cannabinoids.
Ingesting or inhaling these chemicals can cause feelings of euphoria, among other effects. This is what so many in opposition of the drug are hung up about. But as a passionate student of medical science, I want to focus on the potential uses for marijuana from a medicinal standpoint. And hence, an investment standpoint.
Over the past several years, it’s become impossible to ignore that marijuana has become a very hot topic in the biotech industry. As restrictions on medical marijuana ease from state to state, it opens the door to broader research and development of cannabinoid treatments in everything from cancer to Alzheimer’s.
Modern science has found the effects of cannabinoids goes far deeper than producing a little buzz…
Marijuana reacts with several biological systems, allowing vast possibilities in biotech research. Research into marijuana has already led to the discovery of a network inside the body called the endocannabinoid system, which controls both the central nervous and immune systems.
If researchers can figure out how the compounds in the cannabis plant function, they can either extract them from the plant or produce or synthesize them chemically for therapeutic use.
There is a whole range of diseases that we can treat with these compounds.
There’s been research in autism and many other conditions. Cannabis has also been studied in the treatment of multiple sclerosis, an autoimmune disease. Evidence is mounting that cannabinoids help control everything from multiple sclerosis’ pain to involuntary muscle movements. This could well be a future avenue for research.
Studies have also shown that marijuana can decrease side effects of chemotherapy, such as nausea. It may further offer health benefits to people suffering from migraines, anorexia and glaucoma.
We’ve already seen a lot of anecdotal and informal evidence that marijuana actually works on these different health conditions.
Marijuana also offers pain management without the addiction and abuse potential that opioids have. The pain management market is one of the largest pharmaceutical markets, if not the largest segments of the pharmaceutical market.
Some 15,000 people in the United States are dying annually from opiate-related overdoses. Even under careful care in the hospital, people die. That’s because the opiates we use now metabolize slowly. A patient can get out of surgery and be given an opiate, which can later result in respiratory depression. The patient simply stops breathing.
Unlike other drugs, cannabis is relatively safe. With some drugs, the difference between an effective dose and a deadly one isn’t great. But with cannabis, you’d have to consume thousands of times the effective dose to be in danger of death.
I think this is where marijuana or marijuana derived-drugs can make the biggest inroads.
And cannabis-based drugs can be carefully designed and targeted so they don’t have the psychoactive effects of creating euphoria or creating some sort of impediment for everyday tasks. People want to manage their pain, they don’t necessarily want to be high when they’re at work operating heavy machinery or any kind of work that demands normal functioning.
So while marijuana will become increasingly important for medical uses, it won’t be a case of “Take two bong hits and call me in the morning.”
We’re going to be seeing clinical trial news in all these areas soon and I expect it’s going to be positive. That’s going to create positive sentiment for marijuana. Before too long, we’re going to be seeing more and more cannabis-derived or cannabis science-based pharmaceuticals enter the market where they will be very successful.
Add it all up and it becomes clear that marijuana is a compelling story that investors cannot afford to ignore any longer. The profit potential is simply too vast.
The total market, including pharmas, could end up being as big as $100 billion per year. Biotech investors could easily see gains for some of these companies in the hundreds and thousands of percent.
Marijuana companies have already soared just because a couple of U.S. states legalized marijuana for recreational use. It created a wave of marijuana-minted millionaires.
And half a dozen or more states may legalize marijuana over the new year. If that news plays out it will affect the general valuation of many marijuana stocks., I’m betting marijuana stocks will see another incredible surge…
Consider Abbattis Bioceuticals, a Canadian company specializing in “natural health” products, including one containing cannabinoids. It also sold products to help people cultivate marijuana.
Before Jan. 1, 2014, shares traded for about 2.5 cents per share. By March 21, it was trading for $2.46.
In other words, if you bought 1,000 shares for just $25, you would have cashed out with $2,460.
The story was repeated in other companies, too like CV Sciences… Easton Pharmaceuticals… CannaBusiness Group…
There are lots of ways to play the field.
Publicly traded marijuana companies continue to ride a wave of optimism following the 2016 elections. When legalization expands to more states, the tiny pioneers of this market could balloon into industry giants — vastly rewarding anyone who was brave enough to invest at the start of the wave.
But you don’t have to wait for other state governments to get their acts together to benefit from the next marijuana investment surge. In fact, I predict the next big pop could happen in a matter of months, even weeks.
When it does, stocks that are trading today for just a few dollars, even pennies, could soar 773%… 1,120%… maybe even as high as 9,108%.
And I’ve discovered companies that are still flying under the radar of most investors. Of course, the only chance investors have to see these kinds of gains is to buy the stocks before they take off.
Whatever your personal take on marijuana, this is a story investors need to take very seriously.
*Post originally appeared on Daily Reckoning
