Here’s How the Medical Marijuana Industry Could Double in Size in 2020Posted by On


Medical Marijuana Stocks Bound for Growth

The U.S. presidential election is about to kick into high gear, and one of the biggest beneficiaries of this election could be marijuana companies, especially those operating in the medical sector.

Medical marijuana stocks are poised for huge growth if a pro-legalization president finds their way into the White House in 2021. And that’s for one simple reason: a huge influx of capital.

Right now, there are many potential applications for cannabis in the medical field. From easing pain, to treating mental health issues, to fighting conditions like epilepsy, the medical marijuana industry could balloon by an order of billions of dollars in the years to come.

One big holdup, of course, is that, at the federal level, the U.S. currently prohibits marijuana of any kind.

While 33 states and D.C. permit medical pot, due to the federal ban, many pharmaceutical companies have been reluctant to get in on the pot trade. After all, they’d technically be committing a federal crime, even by doing research on the drug. To them, it simply wouldn’t be worth risking the consequences.

At the same time, there’s no doubt in my mind (or the minds of most analysts) that there’s a deep well of untapped potential in the medical marijuana sector, just waiting to be unleashed.

As is the case with Big Pharma, what the medical marijuana industry needs is money and time for research and development.

After all, the typical life cycle of a pharmaceutical drug involves a long period of research and development, followed by potentially years of product testing and stage-by-stage approval by regulatory bodies, all leading up to the medication’s eventual release to market.

This creates a pretty predictable, almost stair-like path for pharma stocks, with each new test that a drug overcomes leading to a higher share-price plateau. This repeats several times until the product is released and we usually see the company’s stock price skyrocket as a result.

Medical marijuana stocks could see the same type of growth in the near future. Only for them, the growth will likely be supercharged.

That’s because many pharmaceutical companies are very interested in testing what medical pot can do. If the substance becomes a viable pain treatment, for instance, that could instantly add billions of dollars in market value.

One estimate has the global pain management drug market hitting $52.6 billion by 2026, up from $35.2 billion in 2017. (Source: “Pain Management Drugs Market Report 2019-2026: Market Value Share Analysis, by Product Type and by Industry Vertical,” MarketWatch, May 2, 2019.)

If medical marijuana is legalized federally, there could be a massive explosion of exciting new treatments that would help reduce the hold that opioids currently have on the pain-management market (not to mention on consumers themselves, which has led to the opioid crisis).

What that means for investors is that there’s a strong opportunity to profit.

And that brings us back to the U.S. presidential election. I’ve written extensively about why this year’s election is the most important one yet for marijuana investors, but up to this point I’ve typically looked at it from a recreational marijuana investor’s perspective.

Medical marijuana stocks, however, could actually gain more than recreational marijuana stocks from a new president sitting in the Oval Office in 2021.

That’s because, while the U.S. president has executive powers to effectively legalize marijuana in all its forms across the U.S., some states could still choose  to not legalize the drug.

In order to bypass those state-level barriers, the U.S. would have to pass legislation at the federal level, something that is done with rarer frequency these days, due to bitter partisanship in the House and the Senate.

Medical marijuana, though, could easily explode onto the scene without the need for Congressional action.

That’s because the president could remove marijuana’s designation as a Schedule I narcotic. That classification, which is used by the U.S. Drug Enforcement Administration (DEA), prohibits research into medical pot because it deems marijuana to have no medical value.

That claim has already been thoroughly debunked scientifically, but as it stands, marijuana can’t even be looked into as a potential medical solution—at least not in the U.S., where a good chunk of the pharmaceutical industry currently sits.

If a new president were to remove cannabis from the Schedule I drug list, we could finally see Big Pharma get involved in the medical marijuana industry in earnest. That could mean billions upon billions of dollars in research funds being poured into finding the next big marijuana-based medicine.

Furthermore, many small marijuana companies operating in the medical sector could be acquired by Big Pharma companies looking to get a foothold in the marijuana business.

Remember that Big Alcohol and Big Tobacco have already done roughly the same thing. Concerned about marijuana’s potential to eat away at their market, some alcohol and tobacco companies have directly invested in marijuana companies, thereby ensuring they’ll be able to ride the green wave to higher profits.

I’d anticipate that several pharmaceutical companies would make similar moves, leading to stock price surges all around. Medical marijuana stocks could, in a matter of days, see billions of dollars flood in from Big Pharma, leading to huge share-price increases.

What that means for marijuana stock investors is that being ready and able to invest at the right time if a new president is elected could lead to massive gains.

Analyst Take

We’re about to experience what may be the biggest rush in marijuana stock history.

Yes, the Canadian pot stock growth we’ve seen over the past few years has been impressive, but it will almost certainly pale in comparison to what we will see with the coming U.S. marijuana legalization. That’s because the U.S. market is several magnitudes larger than the Canadian one.

There’s also another factor at play: the U.S. is, for all intents and purposes, at the center of so many industries, including Big Pharma.

Billions of dollars in research funding are being held up due to the federal laws against marijuana. Until that legislation is changed, medical marijuana stocks won’t be able to reach their full potential.

The upside to this is that cannabis legalization in the U.S. is closer than it has ever been. In a matter of months, we could see huge amounts of capital flow into the medical marijuana sector. And that, dear reader, could be a perfect opportunity to score huge profits.



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