Medical cannabis patients will buy more pot than dopers by 2022
Health & Biotech
share
Patients will spend more money on legal cannabis than recreational pot smokers within four years, according to new research.
That’s a startling forecast given the rapid march of marijuana legalisation around the world this year — prompting earlier predictions that recreational use would surpass the medical market.
In May, shortly before Canada voted to legalise recreational pot, investment bank CIBC predicted Canadians would buy 850,000kg of cannabis a year by 2020 — with a retail value of $C6.8 billion.
But only 40,000kg would go towards medical use, leaving 95 per cent “for adult, non-medical” use, CIBC predicted at the time.
>> Scroll down for a list of ASX cannabis stocks
Researcher Frost & Sullivan now believes medical cannabis revenues “will overtake recreational use revenues in the next four years” in the United States.
That’s good news for ASX cannabis stocks (see table below) — most of which focus on the medical market.
Total cannabis revenue in the United States was expected to grow at 13 per cent a year from $US5.3 billion today to $US10 billion in 2022, Frost & Sullivan reported in new research released this week.
“Revenue projections suggest the medical segment of the market may surpass the recreational revenue segment in the next four years, as patients in US States where marijuana is legal look for alternatives to opioids to treat their chronic pain.”
Medical cannabis is now allowed in about 22 US states, while recreational marijuana is legal in eight.
Cannabis is still technically outlawed by US federal law, however President Trump has indicated that may change.
- Subscribe to our daily newsletter
- Bookmark this link for small cap news
- Join our small cap Facebook group
- Follow us on Facebook or Twitter
The US Food and Drug Administration recently approved a cannabidiol (CBD) drug called Epidiolex, which — when launched — will be the first legal CBD-derived drug on the US market for the treatment of epilepsy.
Cannabidiol (or CBD) is one of the active ingredients found in cannabis. It has well-researched medicinal benefits — but unlike another cannabinoid, tetrahydrocannabinol (THC), doesn’t get you high.
Cannabis market drivers
Frost & Sullivan believes demand for a non-opioid pain treatent will be a key driver in the US medical cannabis market.
“In some US states where medical marijuana has been legalised, prescription pain drug use has reduced, especially opioids. Medical cannabis-derived products have the potential to treat pain, which could significantly curb the out-of-control opioid epidemic gripping the nation.”
Market growth would also be driven by big pharma companies with “the capital and regulatory expertise to get CBD-based drugs approved.
“Billions of dollars are being invested in cannabis research across the globe to study the effects of cannabis on different medical conditions.”
Investors should also keep an eye on Canada’s federal health authority which oversees the country’s use of medical cannabis for pain and diseases like epilepsy.
Health Canada would will be “a reference for future US coverage”, Frost & Sullivan said.
Cannabis market inhibitors
On the other hand, Frost & Sullivan identified a number of factors that would inhibit medical marijuana market growth.
Key factors yet to be resolved included protection of patient data, lack of understanding from physicians (“since they might not have completed medical cannabis coursework in medical school”) and a lack of standardised testing of cannabis plants.
Here’s a list of ASX cannabis stocks with six-month and 12-month share price performance:
| ASX code | Company | Six-month price change (Jan 2) | One-year price change | Price Jul 25 | Market Cap |
|---|---|---|---|---|---|
| CAN | CANN GROUP | 0.0104895104895 | 3.77685950413 | 2.89 | 407.5M |
| QBL | QUEENSLAND BAUXI | -0.296296296296 | 2.45454545455 | 0.038 | 60.6M |
| BDA | BOD AUSTRALIA LT | 0.307692307692 | 2.1875 | 0.51 | 29.3M |
| AC8 | AUSCANN GROUP HO | 0.248447204969 | 1.4512195122 | 1.005 | 316.5M |
| THC | HYDROPONICS | -0.158273381295 | 1.25 | 0.585 | 74.8M |
| BOT | BOTANIX PHARMACE | 0.441176470588 | 1.04166666667 | 0.098 | 75.7M |
| EVE | EVE INVESTMENTS | -0.4 | 0.8 | 0.009 | 17.9M |
| BKL | BLACKMORES | -0.135635163799 | 0.648314606742 | 146.7 | 2.5B |
| CPH | CRESO PHARMA | -0.247311827957 | 0.609195402299 | 0.7 | 79.2M |
| MXC | MGC PHARMACEUTIC | -0.354838709677 | 0.395348837209 | 0.06 | 72.8M |
| ZLD | ZELDA THERAPEUTI | -0.17 | 0.220588235294 | 0.083 | 64.2M |
| RGI | ROTO-GRO INT. | -0.101265822785 | 0.183333333333 | 0.355 | 34.3M |
| EXL | ELIXINOL GLOBAL (listed Jan 2018) | 0.5 | 0.01 | 1.5 | 154.4M |
| 1PG | 1-PAGE (suspended, delisting) | 0 | 0 | 0.165 | 25M |
| CP1 | CANNPAL ANIMAL (listed Oct 2017) | -0.0975609756098 | -0.075 | 0.185 | 17.2M |
| MMJ | MMJ PHYTOTECH LT | -0.384615384615 | -0.0967741935484 | 0.28 | 67.9M |
| RNO | RHINOMED | 0.206896551724 | -0.239130434783 | 0.175 | 19.4M |
| LSH | LIFESPOT HEALTH | -0.0384615384615 | -0.264705882353 | 0.125 | 9.4M |
| MDC | MEDLAB CLINICAL | -0.357142857143 | -0.361290322581 | 0.495 | 101.9M |
| TPE | TPI ENTERPRISES | -0.413043478261 | -0.470588235294 | 1.35 | 109.5M |
| AEB | ALGAE.TEC | -0.269230769231 | -0.5 | 0.019 | 17.3M |
| SCU | STEMCELL UNITED | -0.228571428571 | -0.625 | 0.027 | 13.9M |
| ESE | ESENSE-LAB | -0.755172413793 | -0.677272727273 | 0.071 | 5.7M |
| CHP | CHAPMANS | -0.833333333333 | -0.833333333333 | 0.002 | 4.6M |
