Medical Marijuana Stocks to Invest in Now

With new states in America legalizing the use of marijuana, the industry is set to grow even more in 2017, but investors who wish to buy medical marijuana stocks to profit from this boom have limited options.

For now, the marijuana industry is primarily made up of small firms, many of which are not traded publicly. Of those publicly traded companies, many aren't trading in the major Wall Street exchanges but in markets that may be susceptible to fraud.

Among the stocks that are being traded on the main stock exchanges in America, the most viable options to invest in right now seem to be drug makers that are studying the use of cannabinoids in marijuana as medicine.

The biggest of these firms is GW pharmaceuticals (GWPH), a company based in the UK with a market capitalization of $3 billion that's been researching pot-based medication since the 1990s. GW Pharmaceuticals created a purified solution of cannabidiol in 2016. This formulation successfully overcame a placebo in reducing the number of patients experiencing seizures due to rare and difficult-to-treat types of epilepsy.

The management of GW Pharmaceuticals is about to seek approval of that particular formulation by the FDA. If it is approved, it'll be marketed as Epidiolex. Analysts in the drug industry believe that Epidiolex might eventually generate sales worth hundreds of millions yearly, or more. But there's no guarantee that the formulation will be approved.

Investors searching for medical marijuana stocks should also consider investing in Corbus Pharmaceutical Holdings (CRBP) as well as Insys Therapeutics (INSY). These companies, however, might be more of a risk than GW Pharmaceuticals.

Currently, Corbus is creating a Resunab, an orally-consumed drug that is expected to help patients with cystic fibrosis and scleroderma (sclerosis, a persistent autoimmune rheumatic disease). The company reported interesting midway results for the drug in scleroderma recently. While the progress of Corbus is interesting, the firm still needs to conduct bigger, late-stage research before it can get approval to start selling Resunab.

Insys Therapeutics has arguably even further question marks. In 2016, it's reformulation of the THC-derived drug Marinol won FDA approval, but the drug enforcement administration is yet to schedule the drug, so sales have not started.

All in all, the market for marijuana is certainly intriguing for those hoping to invest in the industry However, it is still very early days and that makes buying marijuana stocks very risk. Tread carefully before investing in this unpredictable industry.