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Marinol: The Newest Marijuana Investing Fad?

Marijuana investing is going mainstream. But there’s a segment of the marijuana industry I’d never heard of until my recent visit to Scotland.

Cash Marijuana Cannabis Plant Stock

Over the past year, I’ve written a lot about marijuana (and marijuana investing), both here and in my top-performing Cabot Marijuana Investor advisory, whose portfolio is up an astounding 214% since it started in August 2017.

And over that year, I’ve consistently used the words cannabis (for the genus of plants, which includes hemp) and marijuana (which is one particular species of cannabis), while avoiding more casual terms like pot and weed that some people use.

That’s my style; I like to be clear.

But over that year I’d never heard the word Marinol, until it was used by a nurse I met while vacationing in Scotland. I’d been discussing my work, and the boom in marijuana stocks over the past year, and she mentioned that people she worked with had high hopes for Marinol, which she described as a clinical form of marijuana oil.
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Upon further investigation, here’s what I found:

New Marijuana Investing Fad?

Marinol is actually the trade name of a synthetic form of tetrahydrocannabinol (THC) called dronabinol, a Schedule III drug that’s used as an appetite stimulant for people with AIDS and for nausea relief for people receiving chemotherapy.

Marinol is made by AbbVie (ABBV), the big drug company that had $30 billion in revenues last year.

AbbVie’s chart is not particularly exciting …

Is Marinol the new marijuana investing fad? Not according to AbbVie's (ABBV) chart.

… but the stock does pay a fat 4.1% dividend, so it might be a good fit for conservative portfolios.

As for Marinol, it’s been a decent treatment for those indications it’s been prescribed for, particularly given that marijuana is still a Schedule I drug and thus illegal to prescribe under Federal law.

But Marinol is not as good as marijuana!

You see, the interesting thing about marijuana is that it contains at least 113 cannabinoids, and some of these provide complementary effects—both physiological and psychological—to the high caused by THC. People in the business call this phenomenon the “entourage effect.”

In the synthetic version of Marinol, which is THC alone—and nothing but THC—there are no supporting effects and the experience is not so pleasant.

Also, Marinol typically costs between $200 and $800 for a month’s supply, while marijuana can provide the same relief—or better—for substantially less.

But doctors keep prescribing Marinol for several reasons.

One, it’s legal nationally in the U.S. when prescribed for the indications mentioned.

Two, the fact that people don’t enjoy using Marinol means no one abuses it—unlike opioids.

And three, medical professionals who remain opposed to the legalization of marijuana prefer the laboratory-created alternative.

But the landscape is changing, and I have no doubt that in the years ahead, as the trend toward federal legalization of marijuana gains momentum, more and more people suffering from the indications above will be prescribed marijuana—ideally along with its companion cannabinoid cannabidiol (CBD).

The Benefits of CBD

THC and CBD are often sold together in a variety of ratios so that consumers can choose the optimum mixture of THC and CBD for their own conditions.

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CBD doesn’t get you high but provides physiological “comfort” through a variety of mechanisms that are not well known yet, primarily because it’s been illegal under federal law to do the research.

And CBD sales are booming today, as growers of hemp ramp up production in response to increasing demand. Which brings me to CV Sciences (CVSI), the biggest provider of CBD in the U.S.

CV Sciences (CVSI)

Headquartered in Las Vegas, CV Sciences makes CBD from hemp, packages it as sprays, capsules, pure oils and balms, and distributes it nationwide through health food stores, health care providers’ offices and online.

And the company reported spectacular growth results in the quarter ended June 30.

Revenues were $12.3 million, up 203% from the year before.

Gross profit was $9.1 million, up 219% from the year before.

And EBITDA was $3.8 million, up from a loss of $0.3 million the year before.

I love companies growing at triple-digit rates. They remind me of stocks like Amazon (AMZN), Google (GOOGL) and Netflix (NFLX) in their early days.

Also, the chart is pretty sweet.

cvsi.png

First, I see a long-term uptrend, which is good.

Second, I see the stock hitting a blow-off top of 9.20 on August 20, just before a short-selling firm sent a tweet that kicked off a wave of selling. The stock needed a correction!

And third, I see a normal consolidation phase since then, with the stock bouncing off its 50-day moving average twice and then calming down in recent days as its 25- and 50-day moving averages come together.

This is probably a good entry point.

But I recommended CVSI to my readers in Cabot Marijuana Investor as a buy soon after the initial bounce off the 50-day moving average and readers who followed my advice now have profits of 27% in the stock.

And that’s in addition to my earlier recommendations made over the past year, which show an average profit of 196%.

Granted, I started the portfolio at a very good time, but it’s not too late for you to get on board. We’re still in the early innings of a major trend that will change our world in many ways, and I’m confident that there will be many more great marijuana investing opportunities ahead.

The best way for you to find these opportunities is to become a regular subscriber.

New Issue Next Week!

The next issue of Cabot Marijuana Investor comes out on Thursday, October 4, and it will contain all you need to be a successful investor in this fast-growing industry.

To learn more, click here.

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Timothy Lutts is Chairman Emeritus of Cabot Wealth Network, leading a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems.