The marijuana industry is growing like a weed, and investors have taken notice. Since the beginning of 2016, many of the top-performing pot stocks have gained triple or quadruple digits, to the delight of investors willing to stomach the volatility.
The big event driving these gains is Canada’s legalization of recreational cannabis on Oct. 17. Although it’s going to take a couple of years for the industry to finish expanding its capacity and for Health Canada to cycle through hundreds of cultivation applications and sales permits, the reward could be huge. Various Wall Street estimates suggest that Canadian pot stocks could see $5 billion or more in added annual sales, atop what they were already generating from medical cannabis sales and via exports.
But as we know from other emerging high-growth industries, not every company can be a winner. Even though it’ll probably take a few years to sort out the direct and ancillary winners from the rest of the pack, occasionally a company emerges that’s so bad it can be safely discarded from future consideration. Within the cannabis industry, one such company currently exists…
Insys Therapeutics (NASDAQ:INSY).
The wheels fall off the wagon, courtesy of Subsys
As recently as four years ago, Insys had everything going for it. The company had a rapidly growing fentanyl-based therapy known as Subsys for the treatment of breakthrough cancer pain, and it was in the process of testing a liquid, oral dronabinol solution as a treatment for chemotherapy-induced nausea and vomiting (CINV) and for anorexia associated with AIDS. Dronabinol is the name for synthetic tetrahydrocannabinol, or THC, the cannabinoid responsible for getting a user “high.” This experimental therapy, known as Syndros, would eventually…
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