The groundbreaking recommendation of a medicine to treat childhood epilepsy is adding to bullish sentiment around cannabis-related stocks.
The drug, Epidiolex, is from GW Pharmaceuticals (ticker: GWPH). It’s derived from cannabidiol, or CBD, and contains a negligible amount of THC, i.e., users don’t experience psychoactive effects.
Epidiolex recently won a favorable recommendation from an advisory panel to the U.S. Food and Drug Administration. “This is a big win for cannabis,” writes MarketWatch columnist Nigan Arora.
This drug has potential to generate over $1 billion in sales by 2022; GW Pharmaceuticals has already had a run based on the news, but there’s still upside, writes Arora. Moreover the company, which also has a pipeline of other promising cannabis-based drugs, is a buyout target, he argues.
While cannabis stocks are generating a lot of buzz (sorry), many of them are very expensive right now. But the space has great long-term promise, Arora writes.
–Steve Garmhausen
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