Biotech Is Floundering — But One Industry Is About to Explode
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Chances are you feel a little down in the dumps about biotech right now.
While May was a decent month for biotech, June has been downright awful.
Take a look at this chart:
Biotech has been up and down since the second half of 2015. Sure, we’ve experienced hopeful upticks, but this month is a humble reminder that we’re not in the clear just yet.
But don’t throw in the towel. There’s an important rule you can use when the markets are in turmoil to avoid the pain and keep zeroing in on the biggest opportunities.
Editor Ray Blanco follows this proven strategy in his Agora Financial’s FDA Trader portfolio. “We don’t buy the whole market,” he says. “What we buy are individual biotech companies with the potential for posting hugely profitable breakout moves.”
And there is one “breakout move” that’s about to blow the roof off biotech. It’s not often we see new industries emerge, but the opportunity to take part in one such move is here right now.
We’re talking the potential for a multibillion-dollar industry… an industry that has already lined the pockets of a select few investors… an industry that could soar starting later this summer… but that also has its fair share of controversy.
We’re talking about pot, folks. By the end of summer, the Drug Enforcement Administration (DEA) is set to make a decision on possibly reclassifying marijuana on a federal level.
Before anyone goes running for the hills at the thought of MJ becoming legal (only slightly legal, might I add), make sure you read on…
First, let’s break down the opportunity:
Marijuana is currently considered a Schedule I drug, meaning it has no proven medical use, a high potential for abuse and serious safety concerns.
Other Schedule I drugs include LSD and heroin…
Currently, according to the feds, marijuana is considered more dangerous than methamphetamine, oxycodone, Percocet and fentanyl. Those last three drugs, of course, can be blamed for the epidemic-level opioid addiction crisis in the United States.
Let me repeat that. As a Schedule I drug, marijuana supposedly has no proven medical use and is considered more addictive than opioids.
Try telling that to people with Parkinson’s disease.
Chronic pain disorders.
All serious diseases, all with side effects evidence has shown can subside with the help of medical marijuana.
If the DEA decides to follow through with reclassifying cannabis, it would consider the plant a Schedule II drug, which means it would be available by prescription only.
But it would mean so much more…
A reclassification would open the floodgates for medical marijuana research. As it stands now, its Schedule I title limits the type of research that can be conducted on cannabis and its components. Researchers are required to fill out endless forms and applications to receive approval to conduct studies using marijuana.
If and when they are given the green light, strict limitations apply, and all the marijuana used in studies comes from one garden, housed at the University of Mississippi. Reclassifying to Schedule II would mean fewer restrictions when it comes to research and development.
“I think it’s just common sense to allow good science to be done,” said Congressman Jared Polis to USA Today. He’s just one of many members of the House and Senate who support marijuana reform in the United States.
Fortune estimates the legal pot market — sales of marijuana in states like Colorado, Washington and Oregon, where it’s legal — could hit $6.7 billion this year. Investors who played pot right have already made a fortune off the recreational marijuana boom that happened when states started passing individual laws on the drug.
Now it’s time to benefit from the potential boom ahead if the DEA decides to reclassify cannabis by Aug. 1. Estimates say the marijuana biotech industry could reach $20 billion — and investors are scrambling to get in before the decision is announced and select stocks take off.
Companies seeking further research on the compounds that make up marijuana — and how they can be of use in a medical setting — are set to make huge profits come Aug. 1.
Like Ray says, it’s playing individual events like this that will keep the heads of biotech investors above water, not relying solely on the ups and downs of the market.
All the best,