Marijuana stocks are a risky but potential gold mine for willing investors ready to play the long game. The expected multibillion-dollar industry that marijuana brought projected huge stocks and investments opportunities. Marijuana stocks have been dropping and losing millions for multiple days in a row. The ETFMG Alternative Harvest ETF MJ, +0.04% was down 1.1%, with 25 of its constituent stocks trading lower. The Horizons Marijuana Life Sciences ETFHMMJ, +0.00% was down 0.3%, with 32 of its 54 constituents declining. Market leader Canopy Growth CGC, -0.66% WEED, +0.03% swung between small gains and losses, as an analyst upgrade weighed against an estimate of the losses that its biggest shareholder is expecting to share for the second quarter. Seaport Global analyst Brett Hundley upgraded the stock to buy from neutral and said it looks attractive after a steep selloff during the summer months. Canopy shares took a hit after its co-Chief Executive Bruce Linton was fired in early July at the bidding of its majority investor, Corona beer distributor Constellation Brands Inc. The drinks giant has invested $4 billion in Canopy and was frustrated that it continues to post losses and sell less cannabis than expected.
Another quarter, another big beat for cannabis stock GW Pharmaceuticals(NASDAQ:GWPH). The biopharma has just revealed that sales of its Epidiolex drug topped Street expectations by over 50% ($68 million vs. $44 million) and doubled Q1 ($34 million).
GWPH recently launched Epidiolex, its flagship product, in the U.S. for congenital seizure syndromes known as Dravet and Lennox-Gastaut Syndrome. Given the drug’s favorable efficacy/safety profile, the significant unmet need, and positive physician feedback, investors had every reason to be hopeful. But GWPH still managed to surprise to the positive.
Epidiolex launched flying as high as a kite, celebrated JP Morgan’s Cory Kasimov. “Though many investors we spoke to pre-quarter were talking a $50M-$55M number, we certainly weren’t expecting something approaching a 7-handle” the analyst admitted. He has just reiterated his GWPH buy rating while ramping up the price target from $214 to $232 (over 50% upside potential).
Plus, near-term label expansion opportunities (Tuberous Sclerosis) and the potential for off-label use in the broader population of general epilepsy patients could contribute significantly to the top line, says the analyst.
Net-net: “With a continued strong US launch, an EU approval in October, and TSC set to come online in mid-2020 (not to mention the potential for future off-label use), we believe there is still plenty of room for shares to continue to appreciate.” In fact, the stock shows a 100% unanimous buy rating from the Street. That’s with a $222 average analyst price target. Interested in GW Pharma stock? Get a free GWPH Stock Research Report.
If you’re looking to get into the marijuana market, while scary now can be a great time to get in while low. The investor needs to be willing to wait and track the market in order to learn and follow the growth.