Last Week’s Top Cannabis Stock Winners And May’s Stocks To Watch
Medicinal and recreational cannabis continues to spur investment in marijuana-based pharmaceuticals.
Several publicly traded cannabis stocks gained more than 5% this past week, some of which have market capitalizations exceeding $50 million, according to Investopedia. The Solactive North American Medical Marijuana Index, which tracks the medical marijuana sector, gained 1.5% for the week.
Cannabis stocks also trade on other exchanges, such as the New York Stock Exchange, Nasdaq and over the counter.
Following are last week’s five top performers, followed by a list of four cannabis stocks to watch for the month of May.
Insys Therapeutics Inc., Nasdaq: INSY
Insys Therapeutics, a Chandler, Arizona-based specialty pharmaceutical company, was one of the week’s top performers, gaining more than 11%. The stock was boosted by Wednesday’s announcement that the U.S. Food and Drug Administration (FDA) has approved the Syndros product label. Syndros, the company’s lead product, is a liquid, oral dronabinol (synthetic THC) solution for treating nausea that is chemotherapy induced, and for treating anorexia related to AIDS. The approval means the company can now market the product commercially.
Insys Therapeutics, Inc. also markets Subsys, a sublingual fentanyl spray for cancer pain in opioid-tolerant cancer patients in the U.S.
The company is also developing Cannabidiol Oral Solution, a synthetic cannabidiol for catastrophic epilepsy syndromes in children. It is also developing other products, such as dronabinol line extensions and sublingual spray products.
Insys has posted flat revenues for the last three years, but its operating income fell at the end of 2016 as the company invested more in research. Gross profit has improved over the last three years.
Insys did not post the biggest gain in the past week, but it is the only one of this week’s top five winners that is also listed on Investopedia’s cannabis stocks to watch for March.
Marapharm Ventures Inc., OTC: MRPHF
Marapharm Ventures Inc., a Kelowna, Canada-based medical marijuana company, gained more than 40% this week after the company announced on Tuesday it will apply for a recreational marijuana license in Nevada. The following day, the company received approval for building permits for modular structures. On Thursday, the company announced that Nevada gave final approval to grow and sell cannabis.
Formerly known as Capital Auction Market Inc., the company serves the medical and recreational marijuana industry in Canada and the U.S.
Marapharm applied to Health Canada for a production and sales license three years ago and has passed the necessary security clearances, according to the Daily Marijuana Observer. The application is currently in the screening process. Health Canada advised the company in September it seeks to amend its application to allow for new regulations.
Marapharm’s common shares are traded in Canada under the MDM symbol and in the U.S. and on the Canadian Securities Exchange under the symbol MRPHF on the OTC. In Europe, it trades under the symbol 2M0 on the FSE.
MMJ Phytotech Ltd., ASX: MMJ
MMJ Phytotech Ltd., trading on the Australian Stock Exchange, gained more than 5% for the week, closing at $0.365 AUD Friday. Australia is developing its own medical marijuana program after legalizing it in November of 2016. MMJ is one of several ASX listed cannabis companies.
Shares of Australian companies involved in the production and research of medicinal marijuana have soared more than 130 percent on average in Sydney this year, exceeding the growth rate of peers in the U.S. and Canada by six times, according to Bloomberg. The surge was also sparked by the country easing restrictions on cannabis imports to treat illnesses from cancer to epilepsy.
MMJ Phytotech has focused on becoming a direct supplier to the growing Canadian recreational and medical and markets, which are estimated to have a combined value of C$8 to C$9 billion by 2024.
MMJ holds one of 41 licenses issued by Health Canada.
The company controls operations across the complete medicinal cannabis value chain through three business units.
Tetra Bio-Pharma Inc., OTC: TBPMF
Tetra Bio-Pharma saw shares jump more than 20% for the week. One factor was an agreement signed Wednesday with Panag Pharma to develop and commercialize a pair of cannabinoid based formulations for treating pain and inflammation.
The filing of a patent in ocular disease combined with the patents from Panag in the ocular space indicates strong revenue potential, according to the company.
Tetra Bio-Pharma will have exclusive access to sell the topical and ocular drug in North America with the right of first negotiation outside the U.S. and Canada. The company will also have the right of first negotiation for future cannabinoid-based products.
Tetra Bio-Pharma will work with Panag to ensure a successful development leading to marketing authorization. Panag will continue to focus on the development of new products for unmet medical needs while Tetra will take the lead in commercializing the products.
Zynerba Pharmaceuticals Inc., Nasdaq: ZYNE
Zynerba Pharmaceuticals Inc., another player in the cannabinoid space, finished the week with about a 5% gain.
The company develops and markets synthetic cannabinoid therapeutics for transdermal delivery. The products address the symptoms of patients with fibromyalgia, epilepsy, peripheral neuropathic pain, osteoarthritis and Fragile X syndrome.
Zynerba is developing ZYN001 and ZYN002, the first being a THC pro-drug patch that provides transdermal THC delivery for fibromyalgia and peripheral neuropathic pain, the second being a synthetic CBD gel that provides transdermal, non-psychoactive CBD delivery for osteoarthritis, epilepsy and Fragile X syndrome.
Top four cannabis stocks to watch in May.
1. AbbVie Inc. (ABBV)
AbbVIe is a pharmaceutical company that already has a cannabis-based drug on the market. The FDA approved Marinol, a drug that helps alleviate vomiting or nausea for chemotherapy patients. It also helps AIDS patients who have lost their desire to eat.
ABBV has increased revenues for the past four years. Its operating income has also steadily increased.
AbbVie concentrates almost exclusively on U.S. markets, which represents some degree of risk. Most pharmaceuticals market globally. Should the domestic market falter, ABBV could see a drop in value.
2. Scott’s Miracle-Gro Company, SMG
Known for its lawn and garden products, Scotts Miracle-Gro is developing products for cannabis growers, including pesticides for use on marijuana plants. The products can be used to grow medicinal marijuana.
The stock has experienced a sideways pattern since December 2016. Should the stock find support at its 200-day moving average, recovery is possible.
Revenues surged in the quarter ended April 1, 2017, as did the company’s income. But given the drop in price recently, this could be a stock to watch rather than buy for the time being.
3. Corbus Pharmaceuticals, CRBP
Corbus Pharmaceuticals stock has been up and down over the past year. The company’s marijuana-based drugs are in clinical trials. Resunab, designed to treat sclerosis, has shown promising trials.
The stock tends to dip right before trial results are announced, then rally when results are positive. The company is currently testing Resunab for treating cystic fibrosis. The pessimism/optimism pattern will continue as this drug is tested yet again.
The company has posted negative operating income, with revenues close to zero. It relies on the success of a single drug.
4. Insys Therapeutics Inc. Nasdaq, INSY
Insys Therapeutics is the only one of the cannabis stocks to watch that was listed among last week’s top gainers.
As investors sober up about the marijuana craze, the reality of using it in medicines will set in. Like other sources for drugs, cannabis offers positive prospects and some failures.
The drop in share price for some cannabis stocks indicates the companies have to deliver soon on the promise of medical cannabis.
Investors are advised not to act based on enthusiasm for marijuana, and to pay attention to drug trial results.