Spreading its roots throughout the contiguous United States, in 2016 recreational marijuana was legalized in California, Nevada, Massachusetts, and Maine. Now that cannabis is legal along the entire West Coast and a large portion of the upper Northeast, a January 2017 study by the National Academies of Science, Engineering and Medicine is providing some conclusive evidence on the medicinal benefits of marijuana. Potentially igniting explosive growth for some well-positioned marijuana stocks in the not-too-distant future, many investors remain skeptical.
Found effective in the treatment of protracted pain in adults, the new study also discovered “conclusive or substantial evidence” that the use of cannabis provides effectual treatment for those suffering from nausea and vomiting caused by chemotherapy, and spasticity brought on by multiple sclerosis.
Related stock: (NASDAQ: GWPH) GW Pharmaceuticals is currently topping the list of companies poised to benefit from these medicinal compounds. Leading its own research on the efficacy of cannabinoids and rare forms of epilepsy, Dravet syndrome and infantile spasms, GW’s stock has vacillated over the last three years.
On the MS front, researchers noted conclusive or substantial evidence that supports the use of marijuana’s cannabinoids for the treatment of MS-related spasticity. Additionally, the study discovered only “moderate evidence” that the plant’s compounds could improve “short-term sleep outcomes in individuals with sleep disturbance associated with obstructive sleep apnea syndrome, fibromyalgia, chronic pain, and multiple sclerosis.”
Related stock: (NASDAQ: INSY) Insys Therapeutics Inc. was given the “thumbs up” last summer by the FDA (Food and Drug Administration). Approved in July, Insys’ Dronabinol oral solution, ‘Syndros’ was approved for use for the treatment of AIDS-related wasting syndrome and chemotherapy-induced vomiting and nausea.
Though the report provides a mountain of substantiating evidence that the oral use of cannabinoids helps those suffering from multiple sclerosis spasticity symptoms, only “limited evidence” was found supporting the use of marijuana as medicine for a host of other ailments, including traumatic brain injury.
What will the impact of this study mean for marijuana stocks in 2017? Only time will tell. But for companies that have already won FDA approval, such as Insys Therapeutics, the negative effects should be minimal.