Although Cannabis is commonly associated as an illegal recreational drug smoked by hippies at festivals, it has been consumed for its medical benefits for thousands of years with the earliest records dating back to 2,900BC by the Chinese Emperor Fu Hsi (Deitch R, 2003).
In more recent times Cannabis has undergone numerous research studies to assess the negative effects associated with regular Cannabis users. However, some scientific data collected by the Institute of Medicine revealed more positive findings, these findings “indicate the potential therapeutic value of cannabinoid, primarily THC, for pain relief, control of nausea and Vomiting and appetite stimulation,” (Special Time Edition, 2017). A more recent study on the Comparative risk assessment of alcohol, tobacco, Cannabis and other illicit drugs using the margin of exposure approach, suggest that Cannabis is a low risk drug and is less dangerous than legal drugs such as Alcohol and Tobacco (Lachenmeier D and Rehm J, 2015). These recent studies have helped change society's view on Cannabis.
Cannabis or medical marijuana used for medical purposes as well as recreational use is becoming more accepted in North America and Europe with many states in the US passing legislation to decriminalize the drug. The first state in the US to legalize Cannabis for its medical purposes was California in 1996. The law permits patients, with a physician’s recommendation, to possess and cultivate Cannabis for the treatments of AIDS, Cancer, Muscular Spasticity, migraines, and several other disorders (Medical Marijuana, 2017). There are currently 29 states out of the 51 in the US that have legalized Cannabis for medical purposes with a further 8 states pending legalization of legislation which, includes Texas and Florida. 9 out of the 29 states have legalized medical marijuana for recreational use as well.
The Cannabis industry includes the cultivation (Growing the crops), the production of Cannabis oils, and production of Cannabis-infused products such as soaps, creams and confectionary, the sales of recreational Cannabis in dispensaries, medical research. The estimated size of the legal Cannabis industry, both medical and recreational in the United States is valued at $7.2 billion. According to ArcView Market Research’s latest report, US national growth in the legal Cannabis market is excellent, with no signs of slowing down. Sales are surging, demand is strong and by 2020, legal market sales are expected to surpass $20.5 billion and possibly reach twice that amount (High Times, 20th Dec 2016) as more states legalize cannabis (medical marijuana). It will be expected that Europe will follow North America and decriminalize the drug for medical purposes. Canada has already proposed a Cannabis Act to legalize Cannabis and create a strict legal framework for controlling the production, distribution, sale and possession across Canada (Government of Canada, 2017). These are tell-tale signs of a potential growth spurt in the industry as more countries decriminalize the drug this will increase the demand for the plant and increase the value of the market. This indicates companies in the industry are going to make large profits in the next 15 years.
In my opinion I believe now is the right time to invest in Cannabis companies to catch the potentially huge returns! Below are a list of companies to keep an eye one in the coming years.
List of cannabis companies:
GW Pharmaceuticals is a biopharmaceutical company focused on discovering, developing and commercializing therapeutics from cannabinoid products for a range of diseases. GW is the global leader in cannabinoid-based medicines. There leading product is Epidiolex which is used for treating rare and catastrophic forms of childhood-onset epilepsy.
Insys Therapeutics Inc.
Insys Therapeutics is also a biopharmaceutical company that has had two cannabis- based drugs approved by the US Food and Drug Administration. Syndros there most recent product approved is used to help boost the appetite for cancer and AIDS-related patients suffering from weight loss.
Medical Marijuana Inc.
Medical Marijuana is a company base in California in the development stage. The company develops and manufactures, sells and distributes hemp oils that contain naturally occurring cannabinoids. The company also licenses its proprietary testing, genetics, labelling and packaging methods for the medicinal herb industry.
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Written by Ben Cousen │Young financial analyst and Co-founder of HNFC
Edited by Vee Venski