Marijuana shares surged higher on Thursday after the Drug Enforcement Administration gave a classification of a cannabidiol-based drug in its least restrictive category, which has set the stage for its U.S. commercial launch.
Shares of GW Pharmaceuticals based the UK rose by 7% to a new high Thursday following the classification announcement. Tilray a cannabis company based in Canada saw its shares soar by 14.7%.
The new drug by GW Pharmaceuticals known as Epidiolex uses CBD (cannabidiol) to help with treating seizures that stem from a pair of severe and rare forms of epilepsy.
The announcement, said on analyst, gave GW a straightforward set up into the market where significant medical need is unmet and there exists a very high demand and awareness of the medication.
The analyst added that the stock continues to be recommended due to the belief Epidiolex’s launch will exceed the expectations it has for its first year.
News of the DEA mild classification arrives amidst a growing fascination Wall Street is having over a few of the companies involved in the cultivating and production of cannabis products for both medical and nonmedical uses.
Other stocks included in this are pharmaceutical companies such as GW Pharmaceuticals that make and market drugs with cannabinoids.
For example, Tilray took Wall Street by storm a week ago after it posted its best-ever day following the approval from the DEA to import marijuana for medical research into the U.S.
Given all the excitement related to the DEA being amenable, shares of Tilray have moved wildly during the last week and a half, as investors are stuck between having a stake in a burgeoning industry and the fears an asset bubble could exist.
Though both Canopy Growth and Aurora Cannabis, two more players in the marijuana industry, were trading lower on Thursday, both have endured a similar stock frenzy the last couple of weeks.
This month Aurora rallied 35% in Canadian trading following a report in Canada that Coca-Cola was holding talks with the company to develop beverages that were marijuana-infused.