Cannabis Science Inc (fka CBIS)

[DouglasJH]

Could legal pot give Big Pharma a much-needed high?


Medical marijuana is already massively profitable for a handful of states, so it's no surprise pharmaceutical giants want in on the action.

By InvestorPlace on Tue, May 31, 2011 10:18 AM

Though it may not be politically correct to talk about the benefits of legalizing marijuana, the bottom line is that many folks are believers in the power of pot as a medication. And those believers include Big Pharma executives looking to boost their bottom lines.

Consider that medical marijuana sales in the U.S. already will reach $1.7 billion this year, with nearly $250 million coming from Colorado, according to a report released in March. Further, the report predicts that medical marijuana sales will reach $8.9 billion if 20 more states allow its sale for medical use.

If the U.S. government ever legalizes marijuana, sales would probably make the $11 billion Pfizer (PFE) raked in on Lipitor worldwide last year look like chump change.

Medical marijuana markets currently exist in Colorado and six other states and will open this year in five more. But that’s just the tip of the iceberg. If people could use marijuana nationwide without the fear of getting busted, some industry observers say, the market would likely be in the $10 billion to $40 billion range and could even top $100 billion annually.

Given the dollars at stake, it’s easy to see why Big Pharma wants in on the action. And recent developments indicate that soon they may be competing with your friendly neighborhood pot dealer.

Just last week, the Drug Enforcement Administration said 55 unnamed companies have been granted licenses to grow cannabis in the United States. Observers say the pharmaceutical companies need the pot farms to cultivate weed so they can produce a generic version of the THC pill Marinol, which is marketed by Watson Pharmaceuticals, Inc. (WPI ), and at least one other cannabis-based pill for a wide variety of new uses.

But to grow pot and put organic THC and CBD in pills, the DEA to would need to move organic THC down from Schedule I to the far less restrictive Schedule III, where synthetic THC Marinol currently resides. That’s exactly what drug companies have requested. And by all indications, their wish is likely to be granted.

These developments have sparked outrage among advocates for legalizing marijuana. They wonder why big companies will be able to grow pot, put it in a pill and call it medicine while those who grow it at home or in a city-permitted pot farm face felony charges and jail. Good point. But welcome to the world of big business, where large companies have high-powered lobbyists pleading their cases in Congress every day.

So which companies are among the fortunate 55 starting up their own pot farms? Probably Watson. Another likely candidate is Valeant Pharmceutical International (VRX), which has a THC prescription drug marketed under the name Cesamet. You can probably add the list such Big Pharma names as Pfizer, Merck (MRK), GlaxoSmithKline (GSK), and Bristol Myers-Squibb (BMY). Novartis (NVS) is probably in there, too, considering the company once tested a cannabinoid agonist to treat chronic pain.




.