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The 1 Legal Way You Could Get Rich From Marijuana

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Times are certainly changing when it comes to the public's perception of marijuana usage.

It all began 16 years ago, when medical marijuana was allowed to be purchased in its first U.S. state. Now, there are 20 states, plus the District of Columbia, that allow marijuana to be sold for medicinal purposes.

Even public opinion of marijuana has improved dramatically. According to a Gallup poll conducted in October, respondents in favor of legalization of the currently illegal drug sat at an all-time high of 58%, while opponents stood at an all-time low of 39%. To put this into some context, just 45 years ago this divergence stood at 84% of respondents against legalization and 12% in favor.

Perhaps the biggest change of all occurred in November 2012, when residents of both the states of Colorado and Washington voted in favor of allowing for the use of recreational marijuana in one's dwelling. It's still illegal to carry more than 1 ounce of marijuana in either state and to grow the plant without a license, but for all intents and purposes, cannabis has gone mainstream for the first time ever in the United States.

However, when all is said and done, marijuana is still classified as a Schedule 1 drug by the U.S. Drug Enforcement Agency, which is the classification for items considered highly addictive and are therefore a controlled and illegal substance. This means that in spite of its growing acceptance -- and the potential, according to research from ArcView Market Research, that cannabis sales could hit $10.2 billion within five years -- there are no active ways for investors to get rich from marijuana.

Save for one.

Source: Carlos Gracia, Flickr.

The one legal way you could get rich from marijuana
Let me introduce you to the one legal way you can invest in marijuana without drawing the ire of the DEA: GW Pharmaceuticals (NASDAQ: GWPH  ) .

GW Pharmaceuticals is a biopharmaceutical company that develops therapies based on more than five dozen cannabinoid compounds that have been identified to date. Cannabinoids are cannabis-plant-derived compounds that GW Pharmaceuticals believes can have a number of positive clinical effects on disorders ranging from inflammation and epilepsy to serious diseases like cancer.

Within the human body, over the past two decades, researchers have discovered a natural cannabinoid receptor system made up of at least two receptors, CB1 and CB2. CB1 receptors are found predominantly in the brain, spinal cord, and peripheral tissues, while CB2 receptors typically are expressed in immune tissues. By utilizing cannabinoids as ligands to bind to specific protein sites, GW can modulate how these receptor behave, and thus effect biologic functions.

GW points out that CB1 receptors are important for energy metabolism, while CB2 receptors "can mediate regulation of cytokine release from immune cells and of immune cell migration in a manner that seems to reduce inflammation and certain kinds of pain." 

This is no longer just a pipe dream
This science behind GW Pharmaceuticals' research is impressive, but it also has real-world applications.

Source: GW Pharmaceuticals.

Sativex, the world's first prescription medicine derived from the cannabis sativa plant, was first launched in the U.K, in June 2010. The therapy, which treats spasticity in multiple sclerosis, cancer pain, and various types of neuropathic pain, consists of two cannabinoids (CBD and THC) and minimizes the effects of spasticity in MS patients without contributing to the "high" often witnessed from smoking marijuana. This is accomplished by delivering Sativex as an oromucosal spray, which slows the absorption of THC into the body and minimizes its psychotropic effects.

Currently, Sativex is being marketed in 11 countries, including the U.K., Italy, Australia, and Canada, and GW has submitted its marketing authorization application in another 13 countries, including France, Saudi Arabia, Egypt, and South Africa.

Not only has GW Pharmaceuticals successfully brought the world's first cannabinoid-based drug to market, but it also boasts a powerful partnership with Japan's Otsuka Pharmaceuticals that has been in place since 2007. The collaboration, which covers a number of possible therapeutic areas for Sativex, allows Otsuka the rights to Sativex in the U.S. (if it gets approval), and could result in a number of revenue sharing opportunities overseas. 

Source: GW Pharmaceuticals.

Moving forward
GW Pharmaceuticals also has a number of other ongoing studies in addition to its ongoing phase 3 trial for MS spasticity in the U.S. and its three ongoing phase 3 trials for cancer pain utilizing Sativex – all fully funded by Otsuka.

GW has received an orphan drug designation for Epidiolex in Dravet syndrome, which is a rare form of pediatric epilepsy, and has a number of other early and mid-stage unpartnered cannabinoid compounds under development, including GWP42004 for type 2 diabetes and GWP42003 for ulcerative colitis, schizophrenia, and glioma, just to name a few.

In other words, this isn't a one-drug hit-or-miss company. We have real-world science delivering clinically effective results, and Sativex generating revenue for GW Pharmaceuticals. If you're looking for a keen way to get in on changing marijuana perceptions, GW Pharmaceuticals may be your best bet -- and likely your only legal one!

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Read/Post Comments (10) | Recommend This Article (24)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 22, 2014, at 12:22 PM, herbwarrior420 wrote:

    it is a schedule 1 according to the feds no medical benefits and very addictive is in the same classification as lsd or esctasy. Even Opiates morphine, synthetic heroin, cocaine are schedule 2 or better and is used medically. since the government committed perjury to all American citizens that it should be on schedule 1 they should be held accountable for PERJURY. If we commit perjury we get locked up. There is scientific and medical research that shows our government has been lieing to us for almost 80 years and still won't delist a plant. Even industrial hemp is a schedule 1 drug. almost no thc all armed forces of USA still use hemp rope.

  • Report this Comment On February 22, 2014, at 2:18 PM, appazay wrote:

    Jbuser, you aren't "fooling" anyone!

  • Report this Comment On February 22, 2014, at 4:48 PM, sullymichaels wrote:

    there are plenty more penny stocks. I look to the growing equipment makers and others - not just pharma (& there's more than 1 pharma too). Others: MWIP, MJNA, ENDO, ERBB, GRNH, CBIS... BUT as stated on a previous post - watch for the 'pump & dump' - this is more gambling than investing (at times).

  • Report this Comment On February 22, 2014, at 6:11 PM, Sam007100 wrote:

    It's not highly addicting.. It's no more addicting than drinking coffee.

  • Report this Comment On February 22, 2014, at 8:26 PM, vet212 wrote:

    Anyone profiting from the sale of this obnoxious and destructive weed should loose every thing. while it does have a legitimate medical use most profit will be from recreational users and those are a drag on our society

  • Report this Comment On February 22, 2014, at 8:33 PM, scoutman wrote:

    i must have smoked a 1/2 ton of this stuff after my seperation from the military.i would not touch this with a 10 ft pole today.i do believe that in the long run, a greater % rather than a small% ,that this leads to use of other drugs.this should have control.based on the type of country we have this is just another match we throw into the mix of an already highly flammable situation...don't do it

  • Report this Comment On February 23, 2014, at 3:35 AM, MurphySteven wrote:

    I found Its a proven hazardous stimulant, like Cocaine and methamphetamine, its a substance, its chemistry at work, not magic, its cause and effect, therefore a hazard, these changes may trigger vessel rupture, strokes in vulnerable individuals culminating in myocardial infarction, and sudden cardiovascular death. Like tobacco users, its air pollution, its burning and creating smoke - its a hazard, It smells like burning cow manure, its air pollution. Its a Health and Occupational Hazard. Marijuana users, are 9.5 times more likely to be involved in crashes and be overlooked for being a user, our biggest problem is to gain the delusion of being harmless. With their Sophistry and Megalomania, if they liked smoking car tires, it would be magically medicinal like Marijuana.Then law suits, higher insurance rates, and higher health insurance, The driver of a charter bus on May 9, 1999, crashed and killed 22 people, was fired from bus companies in 1989 and 1996, after testing positive for marijuana, four times.

  • Report this Comment On February 23, 2014, at 4:27 AM, british123 wrote:

    The marijuana law is controversial to me, that in the Federal law it is forbidden in some states like New york and Colombia allows. Which has authority the state constitution or the federal? In my understanding it is coverage of "democratic right" and the law seems like Asymptote it close to the crime but never touch.

  • Report this Comment On February 23, 2014, at 7:04 AM, Zeme wrote:

    1988 The Department of Justice and the DEA Stated! !!!!!!

    To induce death from Marijuana

    20,000 to 40,000 X as much Marijuana would have to be contained in ONE Marijuana cigarette!!

    To induce lethal response you would need to smoke 1,500 pounds of Marijuana in 15 minutes Marijuana will!! NOT KILL YOU!! Who Smokes like than NO ONE!!

    There are NO Jamaicans SICK or DEAD from smoking Marijuana!

    Statiscally Death directly from Marijuana OVERDOSE is EXTREMELY RARE!

    On the other hand this Crap will KILL YOU!!

    K2 or Spice the (SYNTHETIC) Marijuana these are Actually Directly Proving to be not just Harmful but Much Much More DANGEROUS than NATURAL Marijuana and there are Fatalities being Directly Related to OVERDOSE!

    Marijuana does cause COPD! It's all in how you smoke your weed. If you roll your Marijuana in Blunts from Cigars, Blunt Wraps, Banana Wraps, Lacing your weed with other DRUGS such as Heroine, Cocaine, Crack, Meth, Tobacco and that's just name a few these things are cover with CHEMICALS. That's how people miss get diagnosed, O'h he or she got sick or died from Marijuana when in realty that person/s miss use and abuse what they do you grown investigate before your ventures in LIFE! Cigarettes have 4000 CHEMICALS each. Marijuana does not have have CHEMICALS. When Marijuana is being grown most growers feed there plants very healthy products. I'm from Calif I know I've seen this with my own eyes the POTENCY comes crossing 2 or more types of marijuana seeds.

    The main risk factors for COPD include:

    • Cigarette smoke

    • Age older than 40 years

    • Exposure to occupational dust and chemicals

    • Exposure to smoke from wood or other biomass fires

    • Exposure to indoor air pollution

    • Alpha-1 antitrypsin deficiency

    Occupational Risk Factors

    Workers who are exposed for a long time to toxic chemicals (such as silica or cadmium), industrial smoke, dust, or other air pollutants are at increased risk for COPD. Such workers include:

    • Cooks

    • Furnace workers

    • Grain farmers

    • Miners

    • Women who cook over open fires

    • Railroad workers (from exposure to diesel exhaust)

    Allergies and Asthma

    Allergens are allergy-causing particles and organisms such as fungi, molds, and house dust. The connection between allergies, asthma, and COPD is the topic of much debate. Some physicians believe allergies and asthma are early stages of COPD. Another school of thought says that COPD causes changes to the airways that produce asthma symptoms.

    Although the exact connection is not known, patients with hyperactive airways due to allergies or asthma are at increased risk for COPD. Patients with COPD who can control their airway problems with bronchodilators (the medication used in asthma) are less likely to die from COPD.


    People infected with HIV are 50% - 60% more likely to develop COPD than people who do not have HIV. The percentage of HIV patients who smoke is not much larger than those who do not smoke. This suggests that HIV increases susceptibility to COPD or speeds up the decline in lung function.

    Marijuana Smoking Not Linked to Chronic Breathing Problems

    20-Year-Long Study Finds No Decline in Lung Function for Occasional Pot Smokers!

    Marijuana doesn't lead you to other DRUGS your MIND, HEART, and SOUL is what LEADS YOU to what you do in LIFE! It's on you if you make bad decisions in your LIFE we all learn from something or someone. We all know right from wrong by the time we are at least 10 years old CURIOSITY and how you where RAISED PLAYS a MAJOR ROLL. Once you are grown you must figure it out. With that being said everyone enjoy your day!

  • Report this Comment On February 24, 2014, at 7:38 AM, betwthelines wrote:

    Bobb1011 is right. There are all these penny pot stocks-around 15 or so-and IN GENERAL you want to avoid penny stocks but in this sector i just dont see anywhere but up...Right now there is not a fund but you can build your own fund. Sure, a couple of them will probably go bankrupt but this will be more than made up for by the general increase in value---and i am thinking HUGE increase. I am retired so need to minimize risk but am so confident of a marijuana market play that i am spreading out 5-10% of my IRA among these stocks...tom p

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Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

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