The massive US cannabis market is rapidly turning from pariah to prince, and Aussie pot stocks are looking to cash in.

On Monday, Rhinomed (ASX:RNO) announced a 12-year deal that will see its anti-snoring tech used to deliver medicinal cannabis.

Three other ASX biotechs are trying to crack the US market via clinical trials of novel drug applications or devices.

Medlab Clinical (ASX:MDC) boss Sean Hall is in the US, meeting with authorities to kick off a US approval process for the company’s NanaBis drug, a treatment they’re trialing for cancer pain.

Zelda Therapeutics (ASX:ZLD) has approval for an autism observational study in the US, and in January its stock began trading on an over-the-counter (OTC) early stage venture market in the US, a platform that allows people to directly buy and sell stock from one another without using an exchange as an intermediary.

AusCann (ASX:AC8) is positioning itself as a biotech and while it hasn’t launched any trials or US partnerships, it has also dual-listed on the Over The Counter markets there.

And Botanix Pharmaceuticals (ASX:BOT) has initial support from US authorities to run a phase 2 clinical trial in the US for its dermatitis treatment.

They hope their novel approach — opting for a skin ailment rather than one of the more popular afflictions for cannabis drugs such as epilepsy — will open that market to them.

They’re spurred on by the US Food and Drug Administration regulatory body approving its first cannabis drug, Epidiolex for child epilepsy, in June, which will be priced at $32,500 a year in line with other epilepsy drugs.

Elixinol Global (ASX:EXL) does not do medical cannabis, but does want to cash in on hemp lifestyle products.

The US is already 90pc of the world’s legal weed

The opportunity they’re tackling is enormous.

They want a piece of the $450 billion US drug market, which makes up 45 per cent of global pharmaceuticals.

They also want a piece of the $8.5 billion US cannabis market, which makes up 90 per cent of global legal marijuana trade according to a report this year by Arcview Market Research and BDS Analytics.

Rhinomed boss Michael Johnson believes the US will become the biggest cannabis market in the world, once companies work out how to internationalise it.

Cannabis is still federally illegal, which means products that haven’t been approved by the FDA and been rescheduled by the highly skeptical Drug Enforcement Agency (DEA), can’t move across State or National borders legally.

Rhinomed has got around that, by licensing a nose stent that can be adapted to take cannabis, but other biotechs are going the FDA route in order to have their products federally approved.

“I think… the issue that the federal government has is if you can show there is a safe way of delivering the drug, the issue is how do you control distribution,” Mr Johnson said.

The rules are changing fast

Aussie pot stocks are trying to leverage the rapidly changing US regulatory space.

Cannabis might be federally illegal, but the FDA opened a doorway in for pharmaceuticals and clinically tested treatments, such as Zelda’s and Botanix’s products.

And while the 2018 Farm Bill, while delayed on the back of non-cannabinoid issues, will legalise industrial hemp farming and hemp-derived cannabidiol (CBD) products, and this is where US hemp farmer Elixinol Global (ASX:EXL) is planning to source extra growth from.

Cannabidiol and THC are the two main active elements in cannabis, but the latter tends to be frowned on as it’s the part which gets you high.

“There seems to be a feeling within the industry that is supportive of hemp CBD-based products, towards which the Farm Bill adds the next level of clarification from the US federal government,” Elixinol chief Paul Benhaim told Stockhead.

It will also open the door for universities to test whether natural CBD is better than the synthetic version — a view Mr Benhaim says is born out in the limited studies currently available.

Cannabis is legal recreationally in eight States and in Washington D.C., medically in another 22 States, and nine more are expected to legalise one or the other by 2020.

State laws are starting to ease and opioid crisis fears have led the DEA to quintuple the amount of cannabis grown for research to 2450kg at the sole, government-backed facility at the University of Mississippi, wrote CannaCord analyst Matthijs Smith in September.

Illinois is looking to allow people to swap their prescribing opioids for medical cannabis while California wants to downgrade or wipe marijuana convictions incurred before legalisation in 2016.

“It is estimated that up to 218,000 convictions could be expunged or reviewed,” Mr Smith said.