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New FDA Approved Cannabis Drug Reflects Investor Interest

By , July 1st, 2018 | No Comments

The legalization of marijuana has been a point of debate in the United States for years. However, things appear to be looking up for pro-legalization advocates.  Nearly six in 10 Americans supported legalization in early 2018 and a new FDA approved cannabis drug – Epidiolex – suggests investors may reconsider investing in marijuana stocks.

About The FDA Approved Cannabis Drug

Until now, the Food and Drug Administration hasn’t weighed in on the marijuana debate.  Now, the agency has approved the cannabis-derived drug Epidiolex for the treatment of two rare seizure conditions.  Epidiolex, produced by GW Pharmaceuticals, is an oral form of cannabidiol, or CBD.

This approval is significant for the marijuana industry but it doesn’t allow for the buying-and-selling of CBD from marijuana dispensaries – that is still prohibited by the Drug Enforcement Administration. What the FDA has approved is the prescription of Epidiolex by doctors nationwide, regardless of the state’s stance on marijuana.

Epidiolex is currently only approved for use in patients with Dravet syndrome and Lennox-Gastaut syndrome. During clinical trials, patients with these conditions saw a 40 percent decline in seizures using Epidiolex.  There are approximately 2.2 million Americans suffering from epilepsy, more than 470,000 of which are children. One-third of these patients have not yet found a way to adequately control their seizures.

GW Pharmaceuticals has been working on marijuana research since the 1990s. The company’s past attempts at proving cannabis-derived medications worthy of FDA approval have yielded mixed results. In the past month, the company’s stock has dropped nearly 30 points.

“The key takeaway from the FDA decision to approve Epidiolex is GW Pharma’s approach to harnessing CBD’s potential and packaging it into a medicine that conveys the safety, consistency, and clarity that FDA approval affords,” said Julie Raque, director of marketing at Cannabistry Labs. “This is a step forward for everyone in the cannabis industry, as the government begins to finally acknowledge the powerful potential of cannabis.”

Should You Buy Marijuana Stocks?

On top of the first FDA approved cannabis drug, voters in Oklahoma recently chose to legalize medical marijuana. Now, 30 states have legalized the use of marijuana medically and the potential for high returns has piqued investor interest.

Despite the good news for the pot industry, the United States Marijuana Index lost 8.3 percent last week and the North American Marijuana Index (which includes Canadian stocks) lost 8.2 percent. For now, marijuana stocks are typically not recommended by major brokerage houses – suggesting it may be too soon to safely get into the green gold rush.

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