The Motley Fool: Better Buy: Medical Marijuana vs. GW Pharmaceuticals

Which of these two pioneering cannabis plays is the better buy right now?

George Budwell (TMFGBudwell)

Medical Marijuana (NASDAQOTH:MJNA) and GW Pharmaceuticals (NASDAQ:GWPH) are pioneers of the burgeoning legal cannabis space. However, these two early birds have had a markedly different trajectory since going public. GW's stock has raced higher ever since its IPO on the NASDAQ stock exchange in May 2013. Medical Marijuana's shares, by contrast, have lost most of their value since their public debut approximately 10 years ago.

Is GW still the better growth vehicle or is Medical Marijuana now an attractive turnaround candidate? Let's dig in to find out.

The case of Medical Marijuana

Medical Marijuana, despite its namesake, doesn't sell marijuana in any form. Instead, the company's business centers around hemp-based products. The Real Scientific Hemp Oil family of products is presently the company's main source of revenue, but it has interests in a wide berth of other derivative product categories, including dietary supplements, skin care products, and even prescription medications.

There are two big draws with this stock for potential investors. First off, the recent approval of the 2018 U.S. Farm Bill essentially legalized hemp and hemp-based products stateside. As a result, Medical Marijuana's core business is now legitimate in the U.S. for the most part, although there could be additional headwinds coming down the pike from the U.S. Food and Drug Administration (FDA) over unapproved health claims and quality control standards.

Secondly, hemp-based cannabidiol (CBD for short) oils are experiencing a surge in demand across North America. Interestingly enough, a good chunk of this sharp rise in demand is the result of seniors experimenting with CBD oils as an alternative to costly prescription medications for a variety of chronic and acute ailments. With senior citizens making up a greater proportion of the U.S. population than ever before, this is undoubtedly an encouraging trend for CBD oil companies like Medical Marijuana.

In addition to CBD oils, Medical Marijuana has ownership stakes in the cannabis-oriented chewing gum company CanChew Biotechnologies, the hemp-focused pet entity Phyto Animal Health, the biotherapeutic company KannalifeTM Sciences, Inc., and Axim Biotechnologies. Whether any of these ancillary business development moves will pay off remains to be seen. But Medical Marijuana is at least attempting to broaden its revenue stream and move into other high-margin areas such as prescription medicines.

The bad news is that Medical Marijuana's stock is now priced at less than $0.07 per share. In order to attract blue chip investors, the company will have to dramatically increase the value of its shares -- and that probably means a reverse split (reducing the number of outstanding shares to increase the price per share).

The case for GW Pharmaceuticals

If you were smart enough to buy $10,000 worth of GW's stock at its IPO less than six years ago and never sold a single share in the interim, you'd be staring at a sum of over $184,000 in your account today. In short, this cannabis-oriented drugmaker has been one of the absolute best growth vehicles in the market since its debut.

What's all the fuss about? Recently, GW became the first company ever to gain a regulatory approval from the FDA for a cannabis-derived drug. Specifically, the company's Epidiolex is now approved for two forms of early onset epilepsy: Dravet syndrome and Lennox-Gastaut syndrome, respectively. Equally as important, the drug is performing exceptionally well since its commercial launch -- fueled by strong demand and broad coverage from third-party payers, despite the drug's stately $32,500 annual list price.

Looking ahead, GW is slated to roll out additional late-stage results for Epidiolex in patients with uncontrollable seizures caused by tuberous sclerosis complex later this month. Moreover, the company is working on gaining regulatory approval for Epidiolex in the European Union.

While the news cycle has been overwhelmingly positive for GW for a few years now, there is a serious drawback with this stock. Right now, GW's shares sport a ginormous price-to-sales ratio of 190. Investors are thus clearly banking on Epidiolex's sales growing at an exponential rate from here on out.

Which of these stocks is the better buy?

Despite GW's premium valuation, this cannabis-oriented stock is clearly the better buy. If Epidiolex can achieve blockbuster status (annual sales topping $1 billion) in the next three years like some industry insiders predict, GW's shares will actually look like a bargain in hindsight. Medical Marijuana, on the other hand, has to move out of the penny stock realm before it can be considered an attractive cannabis play. Penny stocks, after all, are prone to dizzying bouts of volatility due to a lack of institutional and blue chip investors.

Here's The Marijuana Stock You've Been Waiting For

A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming.

Cannabis legalization is sweeping over North America – 10 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization came to Canada in October 2018.

And one under-the-radar Canadian company is poised to explode from this coming marijuana revolution.

Because a game-changing deal just went down between the Ontario government and this powerhouse company...and you need to hear this story today if you have even considered investing in pot stocks.

A little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

And make no mistake – it is coming. To the tune of an estimated $80 billion.

Cannabis legalization is sweeping over North America – 10 states plus Washington, D.C., have all legalized recreational marijuana over the last few years, and full legalization arrived in Canada in October 2018.

Legal marijuana is worth an estimated $50 billion for the U.S. today. And since experts have projected the U.S. industry to skyrocket to $80 billion by 2030, it’s time for investors to start paying attention.

Because whether or not you’re planning on ingesting any THC, you can’t deny the monumental investing opportunity that a potentially $80 billion industry represents.

But it’s also a relatively new industry. Untested, unproven.

And while we here at The Motley Fool love being on the cutting edge of new investing trends…

… like picking Amazon at $15.31 a share…

… Netflix at $1.85 a share…

… or Disney at $1.84 a share…

… we’ve been quiet on this growing marijuana industry for a while.

Until now.

Because a game-changing deal just went down between the Ontario government and a powerhouse Canadian company.

And that company – which now has the opportunity to rake in profits from the $7 billion Canadian cannabis industry AND potentially the $80 billion US cannabis industry – is no stranger to us here at The Motley Fool.

Because we’ve actually recommended this stock before… for completely different reasons. Take a look at how it’s done since we recommended it to our members:

472% returns since our July 2016 recommendation

52% sales growth in the past year alone

Estimated 98% of addressable market left to conquer

This Canadian powerhouse has locked in key partnerships with behemoths like Facebook, Amazon, and now the Ontario government.

And even with all that, the company’s CEO (who has a $1.3 billion stake!) declared that he thinks they’re only 2-3% into what this company could eventually become.

We here at The Motley Fool are convinced we’re only in the VERY early days of this company’s trajectory.

Which means there could still be boatloads more profit to be had for in-the-know investors who are prepared to take action.

Now, I don’t like to brag… but we here at The Motley Fool have had a pretty good track record of picking trends before they get big. Take a look at a few of the companies we picked to dominate their field:

Netflix, up 19,583%

Amazon, up 10,588%

Booking Holdings, up 7,980%

Walt Disney, up 6,106%

If you’d invested $1,000 in each of those companies when we recommended them in Stock Advisor, you’d be sitting on $447,000 right now.

Which brings me back to this latest find.

This company’s future doesn’t hinge on marijuana. If all forms of THC were banned forever in the United States, we think this company would still have an incredible field of opportunity. (That’s why we recommended it in the first place.)

But now that there’s an estimated $80 billion industry emerging from the woodwork, their prospects are positively mouthwatering – and we think you’ll regret not getting invested now.

Forget penny pot stocks.

Forget untried, inexperienced cannabis farms.

THIS is the company we think you should have in your portfolio if you want to position yourself wisely for the coming marijuana boom.

And even though this company has had unprecedented success so far and just made a history-defining deal with the Canadian government, far fewer investors than you might expect are taking advantage of this VERY rare moment…

So, due to the urgency of this recent development, we put together a painstakingly researched report that shows you how this one stock could potentially mint its own marijuana millionaires.

It reveals the reasons why we think every forward-thinking investor should be paying close attention to this revolutionary new industry and what might be a potentially life-changing investment opportunity.

This report is FREE to you when you sign up for Stock Advisor today.

Simply enter your email address below to learn about the one stock we think you need in your portfolio for the coming cannabis boom.