The 1 Legal Way You Could Get Rich From Marijuana

Marijuana is considered an illegal drug by the U.S. federal government, but there's still a way you may be able to legally benefit from it.

Feb 22, 2014 at 10:50AM

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!

Even though marijuana could theoretically become a multibillion-dollar industry, GW Pharmaceuticals may not be able to keep up with this top stock in 2014
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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