For US listed companies, it's not every day 420

More than two years after Colorado and Washington State became the first states to legalize recreational cannabis in the United States, In recent years, a small but growing number of companies have staked their development on going public. Some 55 cannabis-related companies are now listed on the stock market, with shares starting at 0.10$. But these highly fluctuating shares are not for the faint-hearted.

After a brief surge in 2014, many cannabusinesses have seen their share prices fall, mainly as the entire industry waits for the US Government to decide on the legal fate of cannabis.

Cannabis market value in the United States

Companies in the cannabis industry form an eclectic mix. Pharmaceutical firms are by far the most successful, with a valuation of 1.5 billion $, or half of the cannabis stock market. Some produce medical cannabis, while others invest in cannabis- or hemp-based medicines to treat pain or sclerosis. Non-medical cannabis producers form the second largest segment, with a value of 645 million $. Two technology companies, for example, are developing «weedotests» for weed smokers.

Cannabis stock market valuation by sector

Many of these companies have experienced the usual pitfalls of shares quoted in pennies on the dollar: rare trades or abrupt rises in share price. Also, some businesses had nothing to do with cannabis until they changed their product lines to enter a new industry.

These 55 companies are valued at over 3 billion $. But there's still plenty of room for others, especially with the 27 states that have yet to legalize at least medical cannabis. In 2016, the question of legalizing medical or therapeutic cannabis is expected to arise in 12 states.

A few examples of’publicly traded US cannabis companies :

• Arena Pharmaceuticals Patent granted for APD371, an agonist (a substance that mimics the effect of another and targets a particular receptor) of the cannabinoid-2 receptor, which is activated in the treatment of pain and sclerosis. Valuation at December 1, 2015: $580 million
• Canadian Cannabis The company grows medical marijuana and distributes it directly to patients. Valuation at December 1, 2015: $54 million
• CannaVest Hemp: involved in the development, production, marketing and sale of hemp-based products for the nutraceutical industry (which targets foods with health benefits). Valuation at December 1, 2015: $19 million
• United Cannabis : biotech company working on the treatment of pain and other medical conditions and the applications of cannabinoid-based products. Valuation at December 1, 2015: $15 million
• Northsight Capital : Develops and manages marijuana-related websites. Valuation at December 1, 2015: $8 million
• Medbox Produces and holds patents for automated marijuana dispensaries. Had a valuation of over 3 billion in 2013, falling back to a tenth of its value the very next day. Valuation as of December 1, 2015: $4 million.

The valuations of all these companies have been falling since April 15, 2015, the date of the Bloomberg article from which our topic is taken. Digging around a bit, we found 3 companies we'd bet on:

• GW Pharmaceuticals GW Pharmaceuticals is the marketer of sativex, a treatment for multiple sclerosis sold in over 15 countries and approved in 12 others, including France. Valued at $2 billion on the stock market, GW Pharmaceuticals' share price has risen overall over the past year. The company generated $46 million in revenues over the last 12 months, with $234 million in working capital.
• Insys Therapeutics The company markets two cannabis-related products. Subsys, used for paroxysmal cancer pain (very violent pain) in opioid-tolerant patients, generates 99% of Insys's revenues, which amounted to $222 million in 2014. The second product is a generic drug, Dronabinol SG, a synthetic cannabinoid that relieves chemotherapy-induced nausea, anorexia and weight loss in AIDS patients. Insys is currently developing two other cannabis-based medicines to treat severe epilepsy in children (Dravet and Lennox-Gastaut syndromes). Also valued at $2 billion.
• Cara Therapeutics develops drugs to treat pain, inflammation and pruritus (itchy skin) with cannabinoids targeting peripheral receptors. Recently listed on the stock market, but valued at $451 million.

Via www.bloomberg.com/graphics/2015-weed-index/