Marijuana legislation was passed earlier this year and recreational pot sales are expected to commence in mid-October, and while medical marijuana has been legalized for some time now, it too could benefit from the new law.
It’s not as if companies are struggling to sell medical marijuana, but legalization will make it easier for patients and those looking for the benefits of cannabidiol to get easier access to cannabis.
Canopy Growth Corp. (TSX:WEED)(NYSE:CGC) and others in the industry have had to rely on medicinal sales so far, and while there has been grown in that segment, there’s clearly much more that could be achieved. In its most recent fiscal year, Canopy Growth recorded $78 million in sales, which is nearly double the $40 million it recorded in the prior year and triple the revenue it booked in 2016.
Sales have been growing at a strong pace — and that’s with medical marijuana still not being covered by most healthcare plans in the country.
What’s holding medical marijuana back?
In a recent interview with the CBC, Dr. Jeff Blackmer of the Canadian Medical Association said that many doctors are still hesitant to prescribe medical marijuana, simply because the benefits remain unclear. A big reason for that is there have been limited studies and testing done on marijuana, which has made it harder to validate its effectiveness in treating patients.
While there are no big obstacles holding back research in Canada, in the U.S., where lots of money is spent on researching various drugs, because marijuana is a Schedule I drug, some big hurdles that prevent cannabis research. Until we see marijuana legalized federally south of the border, the studies we see on cannabis are going to remain limited.
This brings us back to where we are today, and why legalization will open the doors not only for recreational users, but medicinal ones as well. Without relying on a doctor’s prescription, patients can freely seek out cannabis in order to help with their ailments. And although it hasn’t generally been hard to get a prescription for marijuana, legalization will make it even easier to do so, which should enable even more patients to get access to cannabis.
Still many opportunities ahead
Medical marijuana will get a boost from legalization, but without doctors endorsing it or healthcare plans covering it, there will still be patients who remain hesitant to try it without their physician’s recommendation and with the cost not being covered.
Once those hurdles are cleared, we could see even more demand for medical marijuana, and it won’t be until then that its full potential will be realized.
Unfortunately, it could still take many years before we see that happen, and it will be dependent on what studies happen in the future. As countries around the world take steps in legalizing marijuana, we’ll see more data on cannabis come in, but the turning point will be if and when the drug is legalized in the U.S.
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Fool contributor David Jagielski has no position in any of the stocks mentioned.