Ask Our Experts: Cannabinoid-Based Pharmaceuticals
Q: With word on Wall Street being that Canopy Growth, one of the world’s largest cannabis companies, is moving away from pharmaceutical cannabis research, is there still a market for cannabinoid-based pharmaceuticals?
By William Sumner, Hemp Content Manager, New Frontier Data
A: For years now, companies like Canopy Growth have been touting the potential of pharmaceutical cannabinoids, and pouring millions of research dollars into possible applications. That Canopy would now be folding up its tent in that segment would seem foreboding.
Yet as recently explained by Jay Hartenbach, CEO of the CBD brand Medterra, there remains massive potential for cannabinoid-based pharmaceuticals. The issue for Canopy’s pulling away from pharmaceuticals has less to do with the viability of the market and more to do with the timelines involved.
Typically, new drug development can expectedly require 5-10 years’ worth of research and testing. With publicly traded companies looking to keep a competitive edge (like Canopy), that timeline is simply too long. Investors expect results, and many do not want to wait half a decade to get it. Companies willing to play the long game (like Medterra), stand to benefit from such reluctance from the major players.
“I think a lot of these publicly traded companies are getting themselves into a tight position where they built relatively outrageous forecasts, and have largely planned on success and have not found it,” Hartenbach says. “Five to 10 years for drug development is relatively a short amount of time for the potential significant upside on that ROI. That’s why we’re actively exploring it.”