Before the rise of the Canadian unicorns, a secret location in southeast England was said to be the largest legal cannabis growing site in the world. Founded by two British doctors, GW Pharmaceuticals [GWPH] has produced hundreds of tonnes of cannabis at its guarded site since launching in 1998.
Despite the UK announcing plans only in July to allow doctors to prescribe a wide range of medicines made from cannabis, the government has already handed out swathes of licences for growing the drug.
In 2010, almost a decade before the US, the British government was also one of the first to approve a medicine that contains marijuana: GW’s Sativex, a spray used to treat symptoms related to multiple sclerosis. GW made history again in 2018 when another drug it produces became the first to contain naturally derived cannabis to be approved by the FDA in the US.
An industry in development
With a growing number of international licences and new drugs in the pipeline, many are extremely bullish on GW’s outlook. The company was up by 40% over the past year, and 1,500% since floating on the NASDAQ in 2013. Before GW, cannabis pharmaceuticals in the US had been dominated by companies that worked around prohibition by synthesising the effects of cannabis. Established companies with a range of medicines such as AbbVie [ABBV], Corbus Pharmaceuticals [CRBP], Cara Therapeutics [CARA], and Insys Therapeutics [INSY] have all developed drugs using an artificial cannabinoid that was first approved by the FDA in 1985.
With these companies having a hold on a synthetic form that has already been produced, distributed and marketed, it’s perhaps not surprising that many are against legalising the natural stuff: Insys Therapeutics, which has lost 82% of its value since 2015, has spent $500,000 lobbying against the legalisation of cannabis in Arizona. Therapix Biosciences [TRPX] – a company set up to develop medicines from the synthetic THC form – has also suffered over the past year, losing nearly half of its value.
Diversifying the market
Aside from GW, other companies concentrating on producing medicines from naturally occurring cannabinoids include Australia’s Medlab Clinical [MDC] and Zelda Therapeutics [ZLD]. The existing biotech companies operating in this space live in a very different world and offer a completely alternative proposition to the market than medical marijuana growers and distributors in the US or Canada. With regulatory approval, they function as any other pharmaceutical company, and are at far less risk from changes in laws.
It might be one reason why Canada’s largest cannabis producer, Canopy Growth [CGC], is also now setting its sights on medicines. According to Bruce Linton, the company’s CEO, it plans to “completely disrupt the pharmaceuticals industry, from sleep to oncology”.
Canopy Growth recently started clinical trials in Canada, where it is investigating how different combinations of molecules found in cannabis can be used to treat a variety of illnesses. It is also part of a “multi-million pounds” joint venture in the UK with Lady Amanda Feilding’s Beckley Foundation. If successful, Canopy Growth will become the first plant seller to properly cross over into the pharmaceutical industry.