The 2016 elections created a lot of excitement among marijuana and CBD supporters, as voters approved marijuana legalization in eight states, including four states (California, Maine, Massachusetts, and Nevada) that will allow recreational marijuana use.
This has policy-makers thinking more approvals could be coming that further expand the legal marijuana market. As such, investors are increasingly looking for stocks that could benefit from growing marijuana use, including drug companies that are seeking to profit from developing marijuana-derived medicines. A couple drug companies are positioned to take advantage of this and we will evaluate them in a few paragraphs.
However, the companies that have really intrigued are the companies that are adding marijuana and CBD products to their current business but not completely hinging on them, because although it is legal in 50 states with Jeff Sessions leading the Department of Justice you can’t be certain the Feds won’t start trying to turn the clock back on marijuana and hemp.
This is why when I saw NightFood Holdings (NGTF) latest press release I was intrigued.
Before I tell you why the press release intrigued me, let me tell you why NGTF had already been on my radar. They are the first (and currently only) nutrition company to formulate and manufacture sleep friendly snacks to solve the $50 Billion dollar nighttime craving problem.
Their first product is the NightFood nutrition bar which is selling on on Amazon. The product is highly rated and has been gaining traction since becoming available toward the end of June. The company is also planning a few new snacks including the late night snacking staple ice cream.
So with an already high potential business in place, NGTF announced it is working on making snacks utilizing CBD which has been found to help users sleep. This would increase NightFood’s “sleep friendliness” and would certainly be a boon for investors.
However, if something were to change with the federal laws on CBD the company is still in position to succeed with their already exciting product line.
Now if you’re looking for more of a CBD “pure play”, there are a couple intriguing companies.
GW Pharmaceuticals Plc (GWPH) has the most robust pipeline of potential marijuana medicines. The company has already won European approval for its THC drug, Sativex, for treating multiple sclerosis-related muscle spasms, and it’s researching therapies created from the marijuana cannabinoid CBD, too.
Corbus Pharmaceuticals Holdings, Inc. (CRBP) has seen some dramatic ups and downs over the past year. Hopes rise and fall for its marijuana-based drugs, which are in clinical trials. Resunab, which is designed to treat sclerosis, has had promising trials. The stock has tended to dip just before trial results are announced and then rally when the results are positive. Corbus is now testing Resunab as a treatment for cystic fibrosis. The pessimism/optimism pattern will likely continue to play out as this drug is tested yet again. The company has negative operating income, and revenues are close to zero. Corbus is a company depending on the success of a single drug that could make or break it.
AbbVie Inc. (ABBV) is a pharmaceutical company that is ahead of the pack because it has a cannabis-based drug on the market. The FDA approved Marinol, which helps alleviate nausea or vomiting for chemotherapy patients. The drug also helps AIDS patients who have lost their desire to eat. It is important to note that Marinol is not AbbVie’s flagship drug. In fact, it is not even the company’s biggest seller. The company is benefiting from a host of useful drugs, including Marinol. AbbVie is another way to play the marijuana trend without incurring 100% exposure to the plant.
The Scotts Miracle Grow Company (SMG) is an interesting way to play the marijuana boom. Known for its lawn and garden-care lines, the company is developing products for cannabis growers and also several pesticides for use on marijuana plants.