Thanks to the emergence of the marijuana investing space, new plays are being brought to the market for public capital to support in the form of cannabis biotech stocks.

As such, some marijuana companies have turned to the medical sector as a source of inspiration to find the benefits of cannabis plant use for people with various diseases.

Here, the Investing News Network (INN) offers investors a closer look at the state of the cannabis biotech market and which companies are grabbing the attention of investors.

 

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The marijuana industry provides investors with novelty plays in various spaces, including emerging medical efforts.

While marijuana investing is gaining some stability, outside of a few leading stocks, the market still experiences extreme volatility, meaning that investing in the marijuana space is turning out to be a volatile play for shareholders.

With the emergent status of the market and the reliance on new jurisdictions through arduous legalization processes, the stock market for these companies has shown dips and rallies at unexpected times.

This is starting to change as the leaders of the space continue to separate in market capitalization and with the types of partners acquired from established industries.

The potential entry of institutional investors in the marijuana space also inches closer, potentially bringing more stability.

Unlike the extremely volatile cannabis space, biotech, and life science investing as a whole, has proven to be a long-term play for investors who see value in the development of medical research and clinical trials.

As trials for products evolve, critical moments arrive for investors in the form of trial approvals and launches of new drugs or products.

The pipelines for these companies are designed to offer a variety of working models for biotech companies and provide investors with multiple candidates that could accelerate with a trial approval.

In March, a Canadian biopharmaceutical firm released data from a consumer study showing that patients are willing to trust doctors if evolved medical cannabis therapies are offered.

Steeve Neron, senior vice president of marketing and medical affairs with Tetra Bio-Pharma (TSXV:TBP,OTCQB:TBPMF), told INN that the results of standardized clinical trials with marijuana-based medicine will be the ultimate test for consumers.

Neron added that Canadians will require these treatments to be covered by public or private insurance.

 

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In Canada, patients have been able to access medical cannabis from licensed producers such as Canopy Growth (NYSE:CGC,TSX:WEED) and Aurora Cannabis (NYSE:ACB,TSX:ACB).

Medicinal marijuana has even found its way to the online shelves of one of Canada’s largest pharmacy retailers: Shoppers Drug Mart, a Loblaw Companies (TSX:L,OTC Pink:LBLCF) subsidiary.

GW Pharmaceuticals opens the door to fellow biotech companies

The relationship between the cannabis and biotech markets received a boost in 2018, when GW Pharmaceuticals (NASDAQ:GWPH) obtained an approval from the US Food and Drug Administration (FDA) for its cannabidiol-based (CBD) medicine.

Called “epidiolex,” this medicine is designed to treat seizures related to Lennox-Gastaut syndrome and Dravet syndrome in patients two years old or older.

As is the strategy with multiple drug trials, GW targeted a rare disease with epidiolex.

In February, as part of a quarterly update to shareholders, GW disclosed that over 4,000 patients had completed enrolment forms during the first two months of sales for epidiolex.

The pharmaceutical firm secured net sales for epidiolex of US$4.7 million from November to December of last year.

“We are pleased by the high level of physician and patient demand for Epidiolex, and by the number of payors that have already made favorable coverage determinations for the product,” Justin Gover, GW’s CEO, said in the press release.

This landmark approval signaled a target for the development of emerging cannabis-based medicine for advanced treatments.

Since the approval of epidiolex by the FDA, positive sentiment on CBD from market participants has transformed into a bullish stake in the entire CBD sector.

Neal Gilmer, marijuana analyst with Haywood Securities, previously told INN he is bullish on the entire CBD space thanks to the amount of anecdotal information already swaying consumers.

Stocks to follow in the market

As part of its collection of stocks, The Marijuana Index tracks companies that are immersed in the biotech sector and use cannabis in some form.

As defined by the index regulators, these companies “must have a material involvement in the cannabis or hemp industry to be included.”

 

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Here are some of the stocks the index tracks in the biotech space based on largest market capitalization. Data was accurate at the time of publication.

  • Cara Therapeutics (NASDAQ:CARA)

US$18.37 / Market Cap: US$754.57 million / Year-to-date: +26.17 percent increase

This traditional biotech company is exploring possibilities for the use of cannabis thanks to the preclinical development of CR701, a novel therapeutic designed for neuropathic pain.

  • Corbus Pharmaceuticals Holdings (NASDAQ:CRBP)

US$6.70 / Market Cap: US$440.98 million / Year-to-date: +2.29 percent increase

Corbus is a synthetic drugmaker working on cannabinoids for drug development. Its candidate Lenabasum is a synthetic cannabinoid currently in trial for dermatomyositis, cystic fibrosis and systemic sclerosis, according to CNBC.

  • Insys Therapeutics (NASDAQ:INSY)

US$4.14 / Market Cap: US$319.30 million / Year-to-date: -4.83 percent decrease

Recently, this specialty pharmaceutical company informed shareholders of positive test results from a pharmaceutical-grade CBD oral solution designed to treat refractory pediatric epilepsy.

C$3.45 / Market Cap: C$302.09 / Year-to-date: +87.78 percent increase

With the rise of medical-grade cannabis, cannabis extraction services have become key for the marijuana space. As such, MediPharm offers buyers pharmaceutical-grade cannabis oil and concentrates. The company also offers cannabinoid isolation and purification services.

  • 22nd Century Group (NYSEAMERICAN:XXII)

US$1.97 / Market Cap: US$238.07 million / Year-to-date: -26.22 percent decrease

This company is primarily a tobacco venture working on cigarettes with nonaddictive levels of nicotine. As part of a partnership, the company has been working on similarly modified cannabis products.

C$5.99 / Market Cap: C$137.68 / Year-to-date: +39.3 percent increase

Cardiol Theraeutics is a biotechnology company focusing on the commercial development of its researched novel drugs thanks to an expertise with pharmaceutical-grade cannabinoids.

  • InMed Pharma (TSX:IN,OTCQX:IMLFF)

C$0.57 / Market Cap: C$105 million / Year-to-date: +46.15 percent increase

This pre-clinical stage biopharmaceutical company researches cannabinoid therapies in combination with other drug treatments.

  • Zynerba Pharmaceuticals (NASDAQ:ZYNE)

US$4.97 / Market Cap: US$102.82 million / Year-to-date: +33.6 percent increase

This pharmaceutical company is focused on the development of synthetic cannabinoid therapies. Zynerba is working on a trial to evaluate the use of its CBD candidate product in patients aged three to 17 with Fragile X Syndrome.

  • Cure Pharmaceutical Holdings (OTCQB:CURR)

US$3.87 / Market Cap: US$101.27 million / Year-to-date: +46.21 percent increase

This company operates in the life science space thanks to its key oral thin film for medical uses. In terms of cannabis work, Cure plans to use its technology for delivery of cannabinoids.

Investor takeaway

When considering marijuana stocks, investors don’t have to be limited to pure growers. At the rate the industry keeps advancing, plays in the medical market from cannabis companies are offering investors novelty growth plans.

The legalization movement across the globe and the already seen benefits of medical marijuana use for patients are set to continue pushing the cannabis industry for medical use.


INNdepth

Want more details? Check out these articles for more INNdepth coverage.

Want an overview of investing in cannabis stocks? Check Investing in the Cannabis Industry


Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: MediPharm Labs and Cardiol Therapeutics are clients of the Investing News Network. This article is not paid-for content.

 

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Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) today announced that Philip Young, CEO and Director, will present virtually at the Benzinga Healthcare Small Cap Conference taking place September 29-30, 2021.

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US cannabis received a boost this week with a policy move that may hint at future changes.

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/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS/

Avicanna Inc. (” Avicanna ” or the ” Company “) (TSX: AVCN) (OTCQX: AVCNF) (FSE: 0NN) a biopharmaceutical company focused on the development, manufacturing and commercialization of plant-derived cannabinoid-based pharmaceuticals is pleased to announce that it has filed a provisional patent application with the United States Patent and Trademark Office, entitled “Methods for Reducing or Eliminating Incidence of Seizures and Sudden Unexpected Death in Epilepsy”, on the use of a novel cannabinoid formulation (the “ Formulation Candidate ”).

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Cannabis legalization in Canada helped kickstart a financial revolution in the stock market with the launch of a diverse portfolio of marijuana firms.

With the boom of public cannabis businesses in full swing, are you thinking about investing in cannabis companies? If so, consider starting your journey here.

A wide spectrum of marijuana stocks have made their mark in the global industry thanks to the amount of money raised from investors and the attention the sector is getting from established industries.

 

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What’s to come is anyone’s guess, but it seems this new and burgeoning industry is still in its early days, with diverse nations beginning to move forward with plans for legalizing marijuana.

That means there’s likely still money to be made in cannabis stocks as the market builds and cannabis products expand in availability over the next few years.

There are many differing opinions about how much the global legal cannabis market will be worth in the years to come, with estimates including US$70.6 billion by 2028 and US$91.5 billion by that same year.

But one thing is almost certain: The market is set to grow as opinions surrounding the plant evolve over time and as platforms crop up to supply different consumption preferences. And all of that will mean more cannabis investment opportunities with both existing companies and future entries to the market.

For now, let’s take a look at where you can invest your money at this point in time.

How to invest in cannabis: Canadian cannabis stocks

First thing’s first: Canada. This is the obvious place to start as marijuana is legal at the federal level and Canadian cannabis stocks are less likely than their US counterparts to suffer from political volatility.

That said, due to the uncertainty of investing in the US marijuana space, where the drug is not legal at the federal level, Canadian firms have been forced to make choices about how they operate. For example, Canada’s senior exchanges do not allow companies with American cannabis assets to list.

While the Canadian cannabis space continues to face challenges, investors are eagerly watching as companies move into the edibles and beverages markets and develop new products.

For lists of Canadian marijuana stocks to consider, click here.

 

Cannabis Market Could Reach $5.5B By End Of Year

 
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How to invest in cannabis: US cannabis stocks

Although some US states have legalized cannabis, American cannabis stocks may be riskier than those in Canada due to federal restrictions on the sale and cultivation of cannabis.

However, as the saying goes, the greater the risk, the greater the possible reward. The US market could grow up to US$43 billion by 2025, and that’s not even including the size of the market if nationwide legalization happens. It’s easy to see that US cannabis stocks could inherit a huge chunk of the pie if federal law finally legalizes the commodity.

All in all, picking the right US cannabis stocks could mean massive gains if the plant is ultimately legalized federally. It’s worthwhile for investors to do their research and to be aware of the risks and potential benefits involved in investing in the space.

For a list of US cannabis stocks to consider, click here.

How to invest in cannabis: A side note

Many companies in the cannabis space have begun to veer in one direction or another.

For example, some of the largest marijuana producers have moved towards deals with beverage or pharmaceutical companies for the production of novel new products. Others in the space continue to pursue innovation in the recreational market.

The beverage side in particular has seen interest from companies, with cannabis firms partnering with brew businesses. One example is Canopy Growth (NYSE:CGC,TSX:WEED), which has teamed up with Constellation Brands (NYSE:STZ), a leading producer in the alcoholic beverage industry.

It’s important to be aware that each niche has its own possibilities and challenges. For instance, while many market participants are convinced of the promise in beverages, these drinks have been hampered by strict marketing rules, among other factors.

Another aspect to consider is whether to pursue big caps or small caps. That has a lot to do with personal comfort. While big caps are often regarded as more stable than small caps, in the cannabis industry there’s been considerable volatility.

 

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How to invest in cannabis: Cannabis ETFs

If you really know your cannabis companies, then you could enjoy larger gains by simply investing in those specific firms. However, if you aren’t overly familiar with the cannabis space or you are new to it, it could be a good idea to check out the cannabis exchange-traded funds (ETFs) available.

A cannabis ETF gives you exposure to several different cannabis stocks and takes the guesswork out of cherry picking which stock to bet on. One issue with ETFs is that like any other group dynamic, if one stock drops off it brings the whole fund down proportionally with it. Of course, the opposite is also true.

Recently investors have seen the addition of new ETFs offering exposure to the US market, including firms with entries into the hemp space, thanks to the sales of CBD products.

For a list of cannabis ETFs to consider, click here.

How to invest in cannabis: Final thoughts

No matter which way you slice it — or grind it, in this case — the cannabis market is an exciting business to invest in right now. Whether you invest in cannabis ETFs or Canadian or US marijuana stocks, or if you’re still waiting on the sidelines for more maturity from the types of cannabis companies trading, this industry is one to watch, and one that looks like it’ll keep climbing in the future.

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