There's a lot of controversy surrounding the effectiveness of cannabis. While many people will claim that it has helped treat conditions that no other drug could, there are also people who believe marijuana can do no good. And although medical marijuana is legal in more than 30 states across the country, cannabidiol (CBD) that isn't derived from hemp remains illegal at the federal level. There's a key problem hindering the movement to legalize marijuana: misinformation.
CBD is a hot topic on the internet
Individuals are becoming more self-sufficient in the digital era. People often research medical information for themselves. In a study released last July, researchers found that as many as 80% of internet users search for health topics online, up from 62% of users who reported doing so in 2001.
There's lots of online information for consumers to process, especially when it comes to CBD; there are conflicting data and varying reports about CBD's effectiveness. One of the more concerning questions relates to whether cannabis can cure cancer, an area in which CBD receives more hype than it deserves.
A study published a year ago found that false news articles about cancer treatments were much more popular than factual articles claiming cannabis was not effective as a cancer treatment. According to the study, "The top false news story claiming cannabis as a cancer cure generated 4.26 million engagements on social media, while the top accurate news story debunking this false news generated 0.036 million engagements."
Studies still have a long way to go
It's easy to get excited about results from studies, but consumers and investors need to be aware that they could just be the initial steps of what could still be a very long process. For instance, a report last year published by Harvard researchers found that cannabis was effective in curing pancreatic cancer in mice. Although it was one of the plant's many flavonoids that appear to have caused the positive results -- not the CBD or tetrahydrocannabinol (THC). This is another example of how much is still unknown about cannabis plants and how they may help treat illnesses. And while it's an exciting development, researchers still need time to look into the results to get a better understanding. That's not unlike other cannabis studies in their early stages that aren't yet conclusive or definitive. However, some companies are relying on any links they can to help sell their medical marijuana products.
The issue has become such a problem that the Food and Drug Administration (FDA) sent out warning letters in 2019 to several companies that made claims the regulatory body deemed too aggressive. In particular, the FDA reached out to companies that claimed their CBD products could cure or treat diseases, including cancer. It wasn't just smaller cannabis producers making these false claims. The FDA sent a warning letter to large multi-state operator Curaleaf Holdings (CURLF -1.20%).
Why should investors care?
In order for CBD to be seen as an effective treatment option for any disease, patients need to be aware of the risks and have realistic expectations of what it can and cannot do. Touting CBD as a miracle drug that cures cancer raises the bar so high that disappointment becomes inevitable, and that will only hurt the perception people have of CBD and cannabis in general. This negative perception is a factor that keeps cannabis a Schedule 1 substance alongside heroin.
Misinformation can impact consumers' trust in CBD. That can be especially harmful to a company like GW Pharmaceuticals (GWPH), which has the only FDA-approved CBD-based product on the market, Epidiolex. The drug treats Lennox-Gastaut syndrome and Dravet syndrome, two particularly severe forms of epilepsy that can occur in young children. While the drug's sales have been soaring, in order for it to continue growing domestically and internationally, consumers need to have trust in CBD. False and misleading claims about it can undermine the progress made by Epidiolex, raising doubts about whether it actually works.
One important thing to remember is that with thousands of cannabis strains to choose from, it's not as simple as saying that CBD works or doesn't work; context is important as one strain may work for one individual and it may have a very different effect on someone else. That's why the research will take a long time and why results won't be uniform across patients.
The industry's ability to accurately and reliably communicate findings about cannabis to the public will help build trust. As trust grows, more patients can benefit from GW's drug, which will help the company make strides in developing more cannabis-based medicines. As progress is made, the more hope there will be that regulators can be convinced of the effectiveness of CBD, which can only be good news for marijuana stocks.