Please ensure Javascript is enabled for purposes of website accessibility

Adult-Use vs. Medical Cannabis Markets: What Investors Need to Know

By Olivia Zitkus - Apr 10, 2021 at 5:10AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In order for the market to truly break out, we'll need to start thinking differently about cannabis.

The marijuana sector is rapidly evolving. Although the drug is still illegal at the federal level, 16 states and Washington, D.C. have approved the drug for adult-use, and over 30 states have approved the drug for medical use. The Horizons Marijuana Life Sciences ETF (HMLSF -0.83%) has run up over 100% over the past 12 months. This has left pot stock pickers on the edge of their seats, itching to get in on what's all but guaranteed to be stellar growth in the industry.

Many state governments now have to decide exactly how to legalize the drug, asking questions including: For whom is marijuana use legal, and for what use? Dr. Chanda Macias, a medical cannabis advocate, researcher, and dispensary owner, joined Olivia Zitkus and Corinne Cardina on a March 19 episode of Fool Live to talk about how we should approach legalization, and makes an argument for governments to focus on its medicinal properties as they consider permitting cannabis use.

Olivia Zitkus: My next question has to do with comparing the medical market for cannabis to the recreational market and the differences between those two. What do you think cannabis investors, especially new cannabis investors should know about the differences between the medical market and the recreational market?

Dr. Chanda Macias: Olivia, what's very interesting about this, and this is my philosophy and a lot of people support me in this narrative which is, medical cannabis is medicine. Whether it is in a medical state or a recreational, and let me correct that, it's called an adult-use environment, recreational to me, there's no such thing, all of it is medical. When I think about that and the differences in the programs, what comes to mind again is the patient. In the medical program, the patient has HIPAA, which means they have protections on using the medication under the guidance of their physicians, and their physicians have given them permission. So if it's decriminalized or criminalized in that area, they have state protections working with their physicians. Now, in an adult-use market, they are not required to have a medical physician to actually recommend the medicine to them. They're taking it on without those protections, but they might not want to share those, that information about who they are and what their element and condition they're treating for different reasons, and they're with their physician. For example, if you live in Washington D.C. and you work for the federal government, you might not want that public record. Again, I go back to looking at the different programs from a healthcare perspective, about what's best for the patient. Some patients really need that guidance with their physicians and some of them can't have that guidance with their physician. But either way, cannabis is definitely classified as medicine.

Corinne Cardina has no position in any of the stocks mentioned. Olivia Zitkus has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Horizons Marijuana Life Sciences Index ETF Stock Quote
Horizons Marijuana Life Sciences Index ETF
HMLSF
$5.95 (-0.83%) $0.05

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
403%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.