How Hedge Funds Traded Marijuana Stocks in Q1

Treating Epilepsy with Marijuana

As of the end of the first quarter, roughly 26% of Insys Therapeutics Inc (NASDAQ:INSY)‘s common stock was held by 17 elite hedge funds in our database, down from 20 funds with holdings as of the end of the fourth quarter. Earlier this week, Insys Therapeutics announced the completion of the Phase 1/Phase 2 dosing study of its synthesized marijuana cannabidiol (CBD), as it tries to catch up with GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH). The latter is already conducting Phase 3 testing of its own CBD, Epidiolex, designed for patients suffering from epilepsy. Insys Therapeutics Inc (NASDAQ:INSY) said it is looking forward to meeting with FDA representatives to discuss Phase 3 trials. The company is also preparing to study the effect of its version of CBD on Dravet syndrome and Lennox-Gastaut syndrome, two rare forms of pediatric epilepsy. Samuel Isaly‘s OrbiMed Advisors holds 4.55 million shares of Insys Therapeutics Inc (NASDAQ:INSY) as of March 31, up by 5% over the first quarter.

Treating Epilepsy with Marijuana, Part 2

GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) has also maintained its status among the funds followed by Insider Monkey, as the number of funds holding the stock at the end of March remained unchanged from the end of December at 18. Together these funds held ownership of 18% of the company’s outstanding stock. GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) has been researching the use of medicine derived from cannabinoids since 1990 and has successfully developed Sativex, a drug for the treatment of multiple sclerosis symptoms. Having fallen by 43% by mid-March, GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) jumped by 120% on March 14 after the British company announced favorable results from its study of Epidiolex. The drug was designed to address the effects of Dravet syndrome, which affects children under one-year of age. GW Pharmaceuticals said its candidate reduced monthly convulsive seizures by 39%, compared to a 13% reduction from the use of a placebo.

Taking the Pot Out of Pot

22nd Century Group Inc (NYSEMKT:XXII) is a plant biotech company that develops technologies for reducing the level of nicotine in tobacco plants and the level of cannabinoids in cannabis plants. At the end of the first quarter, the stock was not held by any of the funds that we track. Ken Griffin‘s Citadel Investment Group previously held a minor stake of some 7,000 shares on December 31 that were liquidated during the quarter. 22nd Century Group Inc (NYSEMKT:XXII)’s genetic engineering technology allows it to modify the level of nicotine in tobacco plants. This means they can grow plants with increased levels of nicotine for avid smokers or tobacco plants with 97% less nicotine for those who want to quit smoking. Due to their expertise in manipulating tobacco, 22nd Century Group Inc (NYSEMKT:XXII) has recently launched an initiative to produce medically-important cannabinoids in tobacco plants, claiming this could lead to an acceleration in the development of medical products derived from cannabinoids. Shares of the company are down by 39% this year.

Disclosure: None