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Why Medical Marijuana May Be The Best Way To Play The U.S. Cannabis Market

Investors are very much focused on the recreational marijuana market (as they should be). That is where the real money will be made for years to come when the global market becomes fully accessible.

This article has been fact-checked and confirmed accurate and true.

But the push for U.S. marijuana legalization will come in incremental steps—not just giant leaps forward. And that’s why it’s important to turn our attention to the U.S. medical marijuana market.

Across the country, states are pushing through marijuana legalization laws that more and more are including recreational pot. Despite its growing popularity however, these are still the outliers; the norm is still very much for states to pass medical marijuana laws first.

And that makes sense as far as strategy goes. While over half of Americans have been shown to support recreational marijuana legalization in many polls, an overwhelming number of citizens support medical marijuana legalization.

In fact, there already exists a form of legal medical pot: “Epidiolex.” The drug, developed by GW Pharmaceuticals PLC (NASDAQ:GWPH), was approved by the Food and Drug Administration (FDA) last year and has forced a bit of an upheaval already in how the feds process marijuana.

You see, marijuana remains a Schedule I drug according to the Drug Enforcement Administration (DEA). Schedule I means that the drug has no medicinal value. Epidiolex, by virtue of it existing, proves that marijuana does not belong.

The caveat here is that Epidiolex is primarily a cannabidiol (CBD) derivative, so CBD was reclassified while marijuana is still considered Schedule I.

But the drug paved the way for other medicines to potentially push the issue when it comes to drug policy in the U.S.

So if we were to see a marijuana-derived medicine come out and receive approval from the FDA, expect to see a huge rift develop between law and practice, forcing the issue.

That is to say that while marijuana legalization may come all at once in the U.S., it also may very well be segmented, with medical pot leading the way. Were this to happen, expect to see major marijuana companies enter the market via medicinal marijuana.

And the momentum behind the political push for legalized medical marijuana is growing.

Two House representatives penned a letter celebrating the potential of medical marijuana and pushing for reform. (Source: “If marijuana remains a Schedule I substance, we can never do the research everyone knows we need,” ABC News, April 29, 2019.)

Their essay once again shows the rising tide of marijuana reformers in politics, with medical marijuana likely the easiest front to score a victory on considering its mass appeal.

In that case, medical marijuana stocks are likely to see a huge resurgence, while other larger pot stocks will certainly find a way to exploit this opening.

Analyst Take

While U.S. marijuana legalization is closer than it has ever been to becoming a reality, the fact of the matter is that there are still very real forces of opposition.

Medical marijuana legalization is therefore the best chance at seeing legal pot in America in the near future, and pot stocks will bloom as a result.

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