Over the past several years we have seen a trend of marijuana legalization at the state level. Many states have decriminalized marijuana, while others have made it legal to smoke pot as long as it’s for therapeutic purposes. Still other states have fully legalized weed, treating it like alcohol or tobacco. Making it more complicated, cannabis is still illegal at the federal level. And of course in Canada, pot is completely legal now.
Many public companies in the U.S. are now focused entirely on marijuana. For instance, Innovative Industrial Properties (NYSE:IIPR) is offering the industry financing for marijuana farms. Not surprisingly, the stocks in this sector have been very volatile. Will we see the market go crazy for psychedelic stocks, as we saw in the case of marijuana? Or are there important differences between the two sectors? Corinne Cardina, bureau chief of healthcare and cannabis at Fool.com, and Motley Fool writer Taylor Carmichael discuss these two different forms of healthcare in this Fool Live segment, recorded on May 14.
Corinne Cardina: Which brings us back to medical marijuana. I’m curious, are there parallels that investors can draw from in how the medical marijuana overcame some of those hurdles of stigmatization and really creating a new field in healthcare?
Taylor Carmichael: Yeah, that’s interesting. The thing about, we call it “medical marijuana,” to me, and this may be idiosyncratic, but what I almost see in many places that you call it “medical marijuana,” but really it’s just like a wimpy way to legalize it. It’s what they are interested in legalizing it, but they don’t want to (fully) legalize, so it’s like a midpoint. We want to kind of legalize it and people get a note from their doctor and go buy pot. There are medical studies being done about marijuana. I don’t want to discount that, but in the popular culture it does seem to me that a lot of these states are debating the legalization of marijuana. Medical marijuana is that safe step you can take. Because most people, if you ask them well, yeah, because it just makes it sound better. “I’m taking it for my…” whatever reason you have for taking it.
Cardina: It’s a lot further along on the public opinion polls that they do you say, “Hey, should the cancer patient be allowed to take marijuana for their appetite?’ Who’s going to say no to that?
Carmichael: Often what you see is the state makes medical marijuana legal first and then go to the full legalization, that’s what happened in California. Ultimately, I think marijuana is going to be legalized and so it’s going to be a huge market. It’s going to be like alcohol or tobacco, so a multi-multi-billion-dollar market. Medical marijuana ultimately will be a much smaller market. The same guy who did the PTSD study for ecstasy did a study for marijuana to try the same way. They were surprised, but they found no help, there was no efficacy, there’s no difference between marijuana and placebo. Part of the problem they think is that the marijuana that they were given by the government for the study or allowed to use in the study is low-grade marijuana. It’s not the THC, which is the effect that give you the high, it’s like basically half of what you get from everywhere where it’s legal or where it’s sold.
Cardina: They didn’t give them the good stuff?
Carmichael: Yeah, they didn’t give them the good stuff, exactly. That’s why they’re saying, well, it didn’t work. But it had to have been discouraging, they didn’t get that efficacy from it. There are a couple of major differences, one, what we’re seeing for the mushrooms and the ecstasy, it’s both of them combined with talk therapies. Talk therapy is very important for these. Honestly, this might just be my bias, but those studies seemed more legit to me than the medical marijuana thing which is and now it might be personal to me, but I just see that as a step toward full legalization. These people are who are struggling with family, dealing with issues, so they are trying to help them, I’m not seeing that on the marijuana side. On the marijuana side, people like marijuana and want it to be legal, so it’s a different kind of what’s motivating it, I think. I could be wrong.
Cardina: Here is my takeaway, I think with MDMA and psilocybin, we’re not moving toward a world where we have dispensaries that are selling these doctors note or not. It’s a highly controlled environment, a highly controlled dose.
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.