Source: Flickr user PabloEvans.

What's capable of leaping tall buildings in a single bound? It's not Superman anymore, it's the rapidly changing public perception surrounding marijuana.

Over the past two decades, 23 states have approved marijuana for medical purposes, while an additional four others have legalized it for recreational use. More impressively, per Gallup, 58% of respondents in its poll were in favor of marijuana's legalization compared to a measly 25% two decades ago.

Not only does marijuana offer a way for states to bridge their budget deficits by generating more taxable revenue, but marijuana is perceived to offer a number of potentially therapeutic health benefits. For example, cannabinoids derived from the cannabis plant are currently being tested as a treatment for adult and pediatric epilepsy, type 2 diabetes, and cancer pain, to name a few studies.

Marijuana's medical benefits profile takes a hit
However, study results released yesterday by GW Pharmaceuticals (NASDAQ:GWPH), the most high-profile developer of cannabinoid-based drugs, and partner Otsuka Pharmaceutical, could wind up putting a gorilla on marijuana's back right when its momentum was starting to build.

Source: GW Pharmaceuticals.

The study was the first part of a three-study phase 3 trial looking at Sativex as a treatment for cancer pain. Sativex, if the name sounds familiar, is GW Pharma's oramucosal spray designed to treat spasticity associated with multiple sclerosis that's approved in nearly two dozen overseas countries, but not in the United States.

As noted by GW's Pharmaceuticals' press release, Sativex failed to meet its primary endpoint of delivering a statistically significant difference in cancer pain reduction relative to the placebo. Furthermore, the secondary endpoints also missed the mark. The icing on the cake was that 19% of withdrawals were due to adverse events while taking Sativex compared to just 15% for the placebo. Long story short, it was not an encouraging trial in the least.

There are still two additional studies left to be run in GW/Otsuka's phase 3 program: an identical study to the one reported yesterday, which should yield results in the first half of this year, and an expanded study that's modeled similarly to the trial that netted Sativex an approval in overseas markets. Data from the final study will most likely be out in Q4 2015. Chances are, the second study isn't going to yield markedly different results, and I certainly wouldn't suggest holding your breath for the third one, either.

This isn't good for medical marijuana, but it's not devastating either
Yesterday's news is clearly not what marijuana supporters want to hear as they vie for both medical and recreational legalization of the schedule 1 drug.

But, we can also look at this from a bright side as well. Sativex has largely been a disappointment overseas, netting GW Pharmaceuticals a meager $6.5 million sales in spite of being approved in nearly two dozen countries. Even an approval for cancer pain in the U.S. didn't guarantee that Sativex would be a success. While it's not been written off by any means with two additional studies to go, yesterday's failure allowed investors to focus on GW Pharmaceuticals' real opportunity, and an area where marijuana's benefits might shine: treating adult and childhood epilepsy.

Source: GW Pharmaceuticals.

In earlier clinical studies, GW Pharmaceuticals' Epidiolex worked particularly well in reducing convulsive seizure frequency in patients with Dravet Syndrome, a childhood-onset form of epilepsy, and in patients with Lennox-Gastaut syndrome, another childhood-onset epileptic disease. After 12 weeks of treatment, Epidiolex reduced seizures by 56% for Dravet syndrome patients and 52% for patients with drop seizures, which are associated with Lennox-Gastaut syndrome.

A phase 2a study involving GWP42004 also led to a statistically significant reduction in fasting plasma glucose levels and improved beta-cell function in patients with type 2 diabetes. Type 2 diabetes affects at least 26 million people in the U.S., according to estimates from the Centers for Disease Control and Prevention, so this could represent a big market opportunity as well as an opportunity to expound upon marijuana's perceived medical benefits.  

One big question lingers
In spite of GW's trial work, one question continues to linger over the use of medical marijuana: How safe is its use over the long run?

Source: GW Pharmaceuticals.

A number of studies have been undertaken that have looked at marijuana's long-term effects, but few have been geared to observe any benefits. Therefore a good portion of existing long-term marijuana use studies demonstrate that the drug has negative side effects. Marijuana's true place within the medical community could lie anywhere between marijuana being very beneficial and being very risky; we simply don't know yet. Until we have additional data that can allow researchers and consumers to formulate an opinion on its long-term use, it could be difficult to advance research using marijuana or cannabinoids.

With that said, I'm personally not buying into GW Pharma's share price surge following its negative Sativex trial data. Even if Sativex is a dud, simply announcing the completion of enrollment in the first part of a phase 2/3 study for Dravet syndrome involving Epidiolex doesn't justify yesterday's move. I personally believe marijuana remains a dangerous investment opportunity because of these unknowns and would suggest investors steer clear of GW Pharmaceuticals and the sector in its entirety.