Marijuana Stocks: Sean Williams, GW Pharmaceuticals PLC- ADR (GWPH), And Cara Therapeutics Inc (CARA)

One of the most compelling markets for investors is the burgeoning legal cannabis industry. With medical marijuana legal in 28 states and recreational pot legal in 8 more, it’s surely only matter of time before cannabis is permitted at the Federal Level.

But the Donald J. Trump administration may be pumping the brakes on this one. The Federal government has doubled down on Cannabis’ Schedule 1 Status and has tossed out indications that it may crack down on black market sales.

The current black market for cannabis in the United States is worth more than $45 Billion. With legal pot revenue topping $1 Billion in Colorado alone, it should be easy to see that someone, someday is going to get incredibly rich on legal marijuana.

This article appeared first on ModestMoney.com.

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Sean Williams/Motley Fool

I’ve really enjoyed the Motley Fool’s analysis of the 21st century’s “Green Rush”. Recently, Sean Williams did a profile on GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) (1). GW has a drug (Sativex) based on synthesized cannabinoids (laboratory produced versions of natural chemicals within the buds of cannabis), which is effective at reducing spasticity in Multiple Sclerosis patients.

Though Sativex has not been FDA approved, their next drug Epidiolex (another cannabinoid drug, effective at reducing childhood epilepsy symptoms) is successfully undergoing clinical trials.

There are many young pharmaceutical companies testing drugs. What makes GW Pharmaceuticals (2) unique is that its stock has shot up in value by 1,200% in just over 3 years. The question is: should investors jump on $GWPH?

GW Pharmaceuticals’ Past and Future Growth

Sean Williams is hesitant, and so am I.

Pharmaceutical companies are like investors. It takes diversification to win the long game. Currently, GW Pharmaceuticals PLC- ADR (NASDAQ:GWPH) has only one hit drug, and it’s not even legal in the United States. Though early clinical trial results of Epidiolex are promising, there is no guarantee that it will pass FDA scrutiny – a necessary step for any drug that is to be a hit worldwide.

Even though GW Pharmaceuticals has succeeded where so many cannabis-related companies have failed, this is no guarantee that it will continue its upward trajectory. Like so many aspects of cannabis industry investing, it’s a big gamble.