Marijuana stocks may have officially run into a brick wall. According to White House spokesperson Sean Spicer, the administration is gearing up for “greater enforcement” of federal marijuana laws.
“There’s still a federal law that we need to abide by when it comes to recreational marijuana and other drugs of that nature,” Spicer said.
Marijuana investors have been dreading these words from the Donald Trump administration ever since the election. All of the momentum the marijuana legalization movement has gained in recent years is contingent on the federal government looking the other way on enforcement. It is now clear Trump will be doing no such thing.
A federal crackdown on recreational and/or medical marijuana is horrible news for American growers and sellers. However, the crackdown could have a neutral or even positive impact on some marijuana stocks. Investors could use any headline-related dip in these marijuana stocks as a long-term buying opportunity.
Marijuana Stocks to Buy on the Dip: GW Pharmaceuticals (GWPH)
GW Pharmaceuticals Plc-ADR (NASDAQ:GWPH) is a biopharmaceutical company developing a marijuana-derived drug called Epidiolex for treatment of rare brain disorder Dravet syndrome.
Many marijuana growers or retailers skirt the U.S. federal marijuana ban to do business. At the same time, drug companies like GWPH are pursuing perfectly legal paths to the U.S. market. Sure Epidiolex and several of GWPH’s other drug candidates are cannabis-based. But the company is developing its drugs for the U.S. market the same way any other pharmaceutical company would.
So far, that development has been going exceptionally well. Phase III data for Epidiolex has been very positive so far. The drug reportedly reduced seizures by 39% compared to a 13% reduction for the control group.
Analysts estimate Epidiolex will bring in $1.1 billion in revenue annually by 2021.
The company isn’t the least bit concerned about the crackdown.
“Once a Schedule 1 drug that is based on cannabinoids is approved by the FDA, then there’s an automatic process for rescheduling of that approved medicine, not for marijuana or cannabis in general, but just for the compound that was approved by the FDA,” GWPH spokesperson Stephen Shultz clarified after Spicer’s comments.
Marijuana Stocks to Buy on the Dip: Zynerba Pharmaceuticals (ZYNE)
Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE) is…
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