Marijuana Pharmaceuticals: The First (and Smallest) Of Many

Written by Adam English
Posted June 26, 2018 at 4:20PM

There is some big news in the headlines today for medical marijuana.

The first marijuana-derived pharmaceutical has been approved in the U.S. by the FDA.

And while this is a big deal as a milestone, I’m greeting it with a shrug for two reasons.

Part of the reason is, if you’ve read past articles from the Outsider Club, you’d have seen this coming for quite some time.

Just to scratch the surface, I’ve written about how we need to change how we look at the medical marijuana sector, and how CBD in particular is becoming the focus of growers.

And that’s just a couple of my recent articles. For years, the Outsider Club has been ahead of the curve on this, especially our resident expert, Jimmy Mengel.

Let’s ignore the familiarity though, for now.

I’m greeting this news with a shrug because:

  1. This was virtually a done deal, a no-brainer, etc.
  2. There is a flood of similar approvals coming right behind.

I’m looking forward to that flood.

Low-Hanging Fruit

The purified cannabidiol (CBD) oil has already been legalized in several states.

Specifically, the FDA approval is for two rare and serious forms of epilepsy: Lennox-Gastaut syndrome and Dravet syndrome.

This is low-hanging fruit for the FDA. Both conditions are brutally debilitating. Both are types of childhood-onset epilepsy that include severe seizures as well as cognitive and developmental impairment.

The non-intoxicating CBD oil treatment is far more effective than anything else available and a drastic reduction in childhood seizures is a clear improvement in quality of life.

The FDA is going to work its way up from here based on two factors.

First, it is going to continue to focus on drug approvals that completely remove the intoxication issue.

This approval is a big chink in the armor for marijuana as a Schedule 1 substance, denoting no potential therapeutic benefit.

Clearly, that needs to go, because the FDA just invalidated its own classification. Removing this is a major hurdle for opening up funding on the federal level for further research.

But let's face it. The getting high aspect was the justification for marijuana becoming a Schedule 1 substance in the first place, deserved or not.

Second, it is going to be looking at how medical marijuana-derived substances compare to current treatments for the diseases. I’ll add side effects too, but they are incredibly mild for CBD oil.

What’s Getting Approved Next

Those two conditions are limiting factors, but in my opinion it will be a good thing.

After all, the first condition (non-intoxicating) limits testing to CBD oil, which shows incredible potential from pre-clinical trials, surveys, and limited studies.

The second condition (improves upon current treatment) seems like a bigger hurdle — and it might be to doctors who are used to pushing a pill for every condition — but it really isn’t.

Chronic pain, PTSD, Alzheimer’s, Crohn’s disease, Multiple Sclerosis, a long list of cancers, plus mitigating cancer treatment side effects. We’re terrible at handling all of them.

Chronic pain alone is a giant $625 billion target for medical marijuana companies due to the fact that opioid-based treatments were dumped on a long-simmering addiction issue like gasoline on a fire.

But none of these conditions are addressed well by modern pharmaceuticals. Many patients can’t afford what is available, and many of those drugs come with serious quality of life trade-offs.

This recent FDA approval is the first, and smallest, of many yet to come.

Look to the coming wave of research from small companies to help address some of the most vexing problems modern medicine has yet to solve.

My suggestion? Start right here.

Take care,

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Adam English

follow basic @AdamEnglishOC on Twitter

Adam's editorial talents and analysis drew the attention of senior editors at Outsider Club, which he joined in mid-2012. While he has acquired years of hands-on experience in the editorial room by working side by side with ex-brokers, options floor traders, and financial advisors, he is acutely aware of the challenges faced by retail investors after starting at the ground floor in the financial publishing field. For more on Adam, check out his editor's page

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