Are There Good Marijuana Stocks to Invest In Now?

Medicinal uses for marijuana continue to add up – which is increasing the profit potential of marijuana stocks to invest in.

marijuana stocks to invest in Marijuana has been hailed as an effective treatment for pain, cancer, epilepsy, glaucoma, and more. New reports show marijuana is also effective in treating Alzheimer’s disease.

Research published September 2014 in the Journal of Alzheimer’s Disease “strongly suggests that THC (the main active ingredient in marijuana) could be a potential therapeutic treatment option for Alzheimer’s disease through multiple functions and pathways.”

As medicinal uses for marijuana have grown, so has the number of states legalizing it for the treatment of various ailments. Twenty-three states and Washington, D.C., have enacted laws legalizing medical marijuana.

Legal sales of marijuana are forecast to quintuple to some $8 billion by 2019 from $1.6 billion in 2013, according to projections from trade publication Marijuana Business Daily. Last year, the industry generated $2.7 billion in sales.

Also growing is the number of marijuana stocks to invest in. According to Viridian Capital Advisors, there were more than 300 public companies in the sector in 2014.

So which are the best marijuana stocks to invest in today?

Marijuana Stocks to Invest in Today

While marijuana stocks are trendy right now, most aren’t good investments.

Indeed, the Securities and Exchange Commission (SEC) has cautioned investors about the risks of investing in marijuana stocks. The government agency noted some are the subject of investor fraud complaints, which claim they’re nothing more than pump-and-dump schemes.

In 2014, the SEC issued trading halts on several of marijuana-related companies due to suspicious trading activity and investors complaints.

Nonetheless, the SEC in January allowed a share registration to proceed for Terra Tech Corp. (OTCMKTS: TRTC), a company whose business model includes the cultivation and sale of marijuana, which are both illegal under federal law, though legal under some state laws.

The approval was the first green light for a share registration by a company in this line of business. It’s likely to set a precedent for marijuana dealers to access the equity markets. Another company planning to cultivate and sell marijuana has a pending application with the SEC.

Over the last 52 weeks, shares of Irvine, Calif.-based Terra Tech have traded as high as $0.63 and as low as $0.10. Shares presently change hands at $0.13, down 47.08% year to date.

Other pot stocks have also been turning in a weak showing so far this year. BreedIT Corp. (OTCMKTS: BRDT) is down 52.70%, American Green Inc. (OTCMKTS: ERBB) is off 62.31%, and GreenGro Technologies Inc. (OTCMKTS: GRNH) is 53.41% lower year to date.

There is, however, one marijuana stock to consider investing in.

One Marijuana Stock to Invest in Today

GW Pharmaceuticals Plc. (Nasdaq ADR: GWPH) is a U.K.-based biopharmaceutical company. It is devoted to the development and commercialization of cannabinoid prescription medicines.

marijuana stocks to invest in graphThe big attraction to GWPH stock is the company's late-stage marijuana-derived cannabidiol treatment, Epidiolex. The drug is aimed at treating Dravet's syndrome, a rare and severe form of childhood epilepsy.

Epidiolex was granted U.S. Food and Drug Administration Fast Track status on June 6, 2014. FDA Fast Track designation means a drug under review (Epidiolex) targets serious medical conditions and fulfills an unmet and urgent medical need. Typically, trial drugs granted Fast Track designation have greater access to the FDA for the purpose of accelerating the drug's development and FDA review.

The designation also implies a much quicker drug approval process when the drug is given the FDA's nod.

GWPH moved close to getting that nod in May when it launched phase 3 trials of the drug. Slots were filled by early June, and top-line data is expected before the end of 2015.

Money Morning Defense & Tech Specialist Michael A. Robinson pegged GWPH stock as a hot pot stock to watch in early 2014, as a flurry of marijuana-related stocks were on the rise.

"With its solid science, multiple uses for its main cannabis-based biotech product, and strong alliances with global drug leaders, GW Pharmaceuticals should leave investors richly rewarded," Robinson wrote March 27, 2014, when he cited GWPH as the best profit play in the sector.

GWPH stock is up nearly 115% since then.

In addition to Epidiolex, GW has a rich pipeline of other cannabinoid product candidates. Among them is Sativex, in phase 3 clinical development as a potential treatment of pain associated with advanced cancer. Additional treatments include compounds in phase 1 and 2 trials for glioma (a type of tumor that starts in the brain or the spine), ulcerative colitis, type 2 diabetes, and schizophrenia.

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As Robinson noted, the company has partnerships with a couple of the world's largest publicly traded drug firms. GWPH stands to gain more than $300 million in revenue from those alliances alone.

Of the five analysts who cover the stock, four rate GWPH “Buy” and one maintains a “Hold.” The median price target is $135, according to data from The Wall Street Journal.

At $121.65, GWPH shares are up a blistering 80% year to date.

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