This year’s rallies in stock markets have made it difficult for investors to find undervalued companies with solid prospects for expansion. However, one market sector that is still poised for long-term growth is the medicinal cannabis industry, which has shown encouraging trends in legalization movements throughout the Western hemisphere.
Currently, 28 state jurisdictions in the US allow for the medical use of marijuana in some form, and Mexico recently passed a bill through Congress making it legal to prescribe cannabis therapies for patients. Over the next decade, this carves a path to what is now estimated to be as much as $2 billion in revenues for Mexico’s emerging medical marijuana industries. For investors, this unlocks significant potential for opportunity as we have already started to see established companies making headway in the region.
Early Standouts: MJNA
Thus far, the clear industry standout has been Medical Marijuana, Inc. (OTCMKTS: MJNA), which was the first company to receive government approval from COFEPRIS (Mexico’s version of the FDA) to import a cannabis product into the country. In February 2016, MJNA was granted a permit for its cannabis-derived RSHO-X™ products, which are used in treatments for severe forms of epilepsy. Through its HempMeds Mexico® subsidiary, MJNA has expanded its pipeline and has since started exporting its much-needed CBD products to several countries throughout Latin America.
The relative lack of competition in the region creates strong opportunities for MJNA to dominate these untapped markets, and generate strong returns for its shareholders. For the financial quarter ending in June, the total income figures for Medical Marijuana, Inc. came in at $5.7 million, which was a gain of over 230% from the $1.7 million performance that was posted during the same period last year. The company’s net losses also showed substantial improvements, dropping to just over $700,000 and well below the $1 million seen in the previous reporting period.
Capitalizing on Emerging Industries
On balance, this suggests MJNA is a stable and strengthening company that is in a position to capitalize on substantial consumer shifts within the industry. A modernized stance on the use of cannabis as medicine is becoming clearly visible from a governmental perspective in North and South America.
After the passage of its historic bill in support of legalization, Mexico’s government entered into agreements with HempMeds Mexico to purchase CBD hemp oil products that will be used to treat suffering from elusive illnesses that include Refractory Epilepsy and Lennox Gastaut-Syndrome. This essentially goes beyond a government “stamp of approval” and takes things a step further in what amounts to an actual investment in the future of medical marijuana.
Here we have the first example of a case where the Mexican government has actually purchased CBD products for patients in need — and this could open the floodgates for further program initiatives aimed at innovative CBD treatments for elusive illnesses.
“The plethora of benefits of medical cannabis to treat several types of indications is undeniable and we are encouraged to see not only health professionals, but also now governments, are becoming increasingly interested in how CBD hemp oil can help heal,” Medical Marijuana, Inc. CEO Dr. Stuart Titus said in a recent press release.
All told, Medical Marijuana, Inc. is looking like a compelling investment opportunity for those interested in gaining exposure to Mexico’s newly legalized medical cannabis markets. With a strong product pipeline and existing export licenses already in place, MJNA has developed relationships with Mexico’s health authorities that will the enable seamless distribution of CBD products throughout the region. These relationships could open the door to additional product releases down the line, and drive revenue growth for the company in a big way. By all accounts, we are seeing a continental shift in the way the world views marijuana as medicine for a wide range of ailments — and the potential for profitable returns here is massive.