Source: Flickr user Matthew Kenwrick.

For more than 15 years, GW Pharmaceuticals (NASDAQ:GWPH) has been researching marijuana cannabinoids (e.g. THC and CBD) in a bid to profit from pot. The company already has the THC-derived Sativex on the market in Europe as a treatment for multiple sclerosis spasticity, and it has a slate of clinical trials under way that are investigating THC and CBD's use across other indications. For now, however, medical marijuana's promise of profit has fallen short for the company.

Lacking demand
Despite being approved back in 2010 and being available in 27 countries, sales of Sativex remain a trickle. In fact, sales were so small for the drug that the company didn't even bother breaking them out for investors in its just-released fiscal-first-quarter earnings release.

Since the company didn't update Sativex's sales numbers, investors are probably correct to assume that they haven't budged much from fiscal 2014's $1.5 million to $2 million quarterly pace. If that's true, then it's unlikely that Sativex will ever become a top seller -- at least not as a European MS spasticity drug.

Source: GW Pharmaceuticals.

Overcoming disappointment
In January, Sativex's future as a cancer-pain treatment was somewhat dashed when GW Pharmaceuticals reported that data from the first of three phase 3 studies failed to outperform placebo. Although the company still has two additional Sativex cancer-pain trials ongoing, the failure of the first trial casts doubt on GW Pharmaceuticals' cannabinoid program and the company's ability to generate a significant revenue stream from it.

Investors will get more insight into GW Pharmaceuticals' opportunity in the cancer-pain indication when the second trial results become available in the second quarter; however, investors might be right to temper their expectations given that the second trial is identical in design to the failed first trial.

Instead, the company's best chance for success in the indication could prove to be the third trial, which was designed differently. Data from this third trial isn't expected until much later this year.

Targeting an unmet need
The company's cancer-pain stumble puts even more pressure on GW Pharmaceuticals' epilepsy-research program. In that program, the company is studying whether or not CBD, the non-psychotic chemical component of marijuana, can improve outcomes for patients suffering from both Dravet Syndrome and Lennox-Gastaut syndrome -- two rare forms of epilepsy that currently have few treatment options.

GW Pharmaceuticals reports that it has completed enrollment in part A of its phase 2/3 Dravet syndrome trial, and that it will commence the part B phase of that trial this quarter. A second phase 3 trial for Dravet is expected to complete enrollment by the end of the year, too. Two phase 3 trials in Lennox-Gastaut will also get under way this quarter, and enrollment in those trials should also be complete by year's end.

There's little doubt that a new treatment option for these two conditions would be very welcome by patients and prescribers. Currently, there is no standard of care in treating these patients beyond daily anticonvulsants. However, investors should recognize that these are small patient populations. There are only about 5,000 to 6,000 cases of Dravet in the United States, and half that number of cases of Lennox-Gastaut. Regardless, the company expects that investors will be able to digest data results from at least one of these epilepsy trials by the end of 2015.

Advancing other programs
Although the cancer-trial failure shifts a lot of investor focus to GW Pharmaceuticals' epilepsy trials, the company is also researching whether or not marijuana cannabinoids could help patients with other conditions, too. The company hopes to report results from a phase 2a trial of GWP42003 in schizophrenia patients in the second half of this year, and GW Pharmaceuticals' phase 2b study of GWP42004 as a type-2 diabetes therapy is expected to have data available in 2016. Beyond those programs, GW Pharmaceuticals is also conducting studies of marijuana cannabinoids as a brain-cancer treatment.

Looking forward
Although the company's medical-marijuana programs were dealt a blow when the first cancer-pain trial results were announced, investors appear content to wait and see the additional cancer-pain trial results and the results from the epilepsy trials before selling shares.

That approach could prove to be risky. Shares of GW Pharmaceuticals have climbed 80% since the end of 2013, and with little revenue from Sativex, a stumble in the remaining two cancer-pain trials could significantly dent the company's peak sales potential.

Regardless, investors can take some solace in knowing that GW Pharmaceuticals has plenty of cash on hand to continue funding its research. Exiting the fiscal first quarter, cash and equivalents totaled $243.9 million. That should be plenty to keep the lights on.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.