While smaller drugmakers such as GW Pharmaceuticals (NASDAQ:GWPH) and Corbus Pharmaceuticals (NASDAQ:CRBP) have plowed headlong into medical marijuana research, most of the largest pharmaceutical companies have stayed on the sidelines. Most — but not all. A few of the top names in the sector have recognized the potential of cannabis. The rise in opioid lawsuits may lead drug companies to cannabinoids in the search for less-addictive pain relievers. It doesn’t hurt that the compound annual growth rate (CAGR) of the global market for medical marijuana, according to one study, is estimated to be 24% over the next four years. This could considerably rise if federal laws around medical marijuana loosen. The reticence of those who have stayed out of this emerging business may not last long, especially with the share prices of the aforementioned stocks rising quickly. Johnson & Johnson (NYSE:JNJ), AbbVie (NYSE:ABBV), and Teva Pharmaceutical (NYSE:TEVA) are huge pharmaceutical companies that are less likely to see that same type of explosive growth in share price, but all three are establishing, at a distance, connections to medical marijuana.
GW Pharmaceuticals made big news Monday when the U.S. Food and Drug Administration expanded its approval for the oral form of Epidiolex to treat seizures from tuberous sclerosis complex, a leading cause of genetic epilepsy that often produces benign tumors. Epidiolex, the only FDA-approved cannabidiol (CBD) treatment, was initially approved in 2018 for the treatment of seizures associated with Lennox-Gastaut syndrome (LGS) and Dravet syndrome, two types of childhood epilepsy.
Given the possibility of massive global market growth over the next decade and the successes of small companies like GW Pharmaceuticals, it’s not a surprise that three of the biggest drug companies in the world are quietly testing the waters on cannabis and preparing themselves for the possibility of medical marijuana legalization in the U.S.
Johnson & Johnson’s cannabis association
Johnson & Johnson topped all pharmaceutical companies for revenue last year, and while you won’t find the words “marijuana” or “cannabis” anywhere in its annual report, it is well-positioned to jump into the market.
Start with Avicanna, a biopharmaceutical company with facilities in Colombia that is focusing on commercializing cannabinoids for medical and wellness use. Avicanna is headquartered at Johnson & Johnson’s JLABS, a medical and science incubator in Toronto, which provides Johnson & Johnson mentors and access to the…