The medical cannabis industry has long battled naysayers in the US market. In the US, 33 states and Washington, D.C., have already legalized medical marijuana. The federal government prohibits the use of cannabis. However, this may change in the near future as mainstream scientists and big pharmaceutical companies continue taking an interest in the medical cannabis industry.
These days, experts are discussing the pros and cons of medical cannabis at multiple conferences and summits around the world. One such summit is the 2nd Annual International Cannabinoid-Derived Pharmaceuticals Summit. It’s taking place from September 10 to September 12.
At the summit, prominent speakers will touch on a variety of topics pertaining to the medical cannabis industry. There will also be case studies, workshops, panel discussions, and poster sessions. Speakers will discuss the changing R&D (research and development) and regulatory landscape in the industry. They’ll also discuss GW Pharmaceuticals’ (GWPH) Epidiolex, which marked the FDA’s first approval of a cannabinoid-based pharmaceutical drug.
Speakers also plan to discuss the various scientific challenges medical cannabis companies face during the drug-development process. These discussions could pave the way for scientific scrutiny of cannabis’s potential in the medical arena. Such scrutiny could lead to the way toward the increased adoption of cannabinoid-based pharmaceuticals in the coming years.
Investors should keep an eye on some other cannabis-related events taking place over the next few months. The Medical Cannabiz World 2019 summit is scheduled for November 4 and 5 in Malta and for June 22 and 23, 2020, in Bangkok. There’s also MedCan 2020, the first-ever international medical cannabis summit in New Zealand, which is scheduled for March 19, 2020.
Medical cannabis offers a huge market opportunity
ResearchandMarkets estimated that the global medical cannabis market was worth $13.4 billion in 2018. The research agency expects this market opportunity to grow at a compound annual growth rate of 22.9% to $44.4 billion by 2024.
Statista expected US medical marijuana retail sales in 2018 to be $4.5 billion. It expects US medical marijuana retail sales to reach $7.3 billion by 2022, which is almost double the reported amount in 2017. To learn more about the US medical marijuana market opportunity, read What’s the Estimated Market for Medical Cannabis in the US?
Statista also expects the cannabinoid-based pharmaceuticals market in the US to be worth $50 billion by 2029. The demand for cannabinoid-based pharmaceuticals could also be a key growth driver for the medical marijuana industry. In fact, many medical cannabis producers have already started recognizing the huge potential in cannabinoid-based pharmaceuticals.
Aurora Cannabis is working hard to leverage this opportunity
Aurora Cannabis (ACB) is one of the world’s leading medical cannabis players. In the third quarter of fiscal 2019, it reported net revenue of $29.08 million from the sale of medical cannabis. This performance marked a YoY (year-over-year) rise of 169% and a sequential rise of 20%. The company also reported YoY rises of 8% and 38%, respectively, in medical cannabis revenue in Canada and international markets. On May 14, Aurora Cannabis had 82,745 active registered patients.
Aurora Cannabis is also rapidly advancing its R&D capabilities. According to its third-quarter earnings call, it’s been involved in over 40 clinical trials and case studies to study the medical benefits of marijuana. According to its corporate presentation, the company is studying cannabis-based products (either alone or in partnerships) in multiple medical conditions. These conditions involve cancer pain management, osteoarthritis, epilepsy, Tourette’s syndrome, epilepsy, and chronic pain.
On July 24, the company and mixed martial arts organization UFC launched a clinical research program. With the program, the company will evaluate the efficacy of hemp-derived CBD as a treatment option for pain, inflammation, and wound-healing for athletes. Read Aurora Cannabis: New Clinical Trials on Hemp-CBD to learn more.
Canopy Growth is also gearing up for the medical marijuana opportunity
On its first-quarter earnings call, Canopy Growth (CGC) highlighted the commercial potential in launching a medicinal cannabis product that’s clinically validated, produced at good manufacturing practice standards, and covered by insurance. To this end, the company launched a global brand called Spectrum Therapeutics. To learn more, read Canopy Growth Launched a New Global Medical Brand.
In May, Canopy acquired C3, the largest cannabinoid-based pharmaceutical player in Europe. Then, on August 9, it strengthened its cannabis-based R&D capabilities by entering an agreement to acquire Beckley Canopy Therapeutics.
In the first quarter, the company reported medical cannabis revenue of $13.1 million in Canada, a YoY fall of 38%. However, it reported a YoY rise of 209% in international medical cannabis revenue to around $10.5 million. According to Canopy’s first-quarter earnings call, C3 accounted for $8.8 million of its medical cannabis revenue.
GW Pharmaceuticals already leads in cannabinoid-based pharmaceuticals
GW Pharmaceuticals started trading on the Nasdaq on April 18, 2013, at an offer price of $8.90. On September 11, 2019, the stock closed at $150.26. GW Pharmaceuticals is up 54.29% YTD (year-to-date). It’s trading at lofty valuation multiples, with a forward PE ratio of 122.16x and a price-to-sales ratio of 39.10x.
GW Pharmaceuticals made history on June 25, 2018. For the first time ever, the FDA approved a cannabinoid-based pharmaceutical, Epidiolex, for treating medical conditions. These conditions include Lennox-Gastaut Syndrome and Dravet Syndrome, two rare and severe forms of epilepsy for patients aged two years or older.
In the second quarter, GW Pharmaceuticals reported revenue of $72.11 million, a YoY rise of 2,046.69% and $26.53 million higher than the consensus estimate. The company, however, has yet to become profitable. GW Pharmaceuticals reported non-generally accepted accounting principles EPS of -$0.65 in the second quarter, $0.10 lower than the consensus estimate. Analysts expect the company to become profitable in fiscal 2020. Read GW Pharmaceuticals Is Expected to Turn Profitable in 2020 for more info.
According to its second-quarter earnings call, GW plans to submit a supplemental new drug application seeking FDA approval for Epidiolex in tuberous sclerosis complex indications in the fourth quarter. It’s also recruiting patients in a Phase 3 trial evaluating Epidiolex in Rett syndrome indications. Success in these research programs could further bolster the medical cannabis industry’s credibility in the coming years.