Pharmaceutical giants such as Pfizer Inc. (NYSE:PFE) and Merck & Co., Inc. (NYSE:MRK) are now considering acquisitions in the marijuana industry.
Research data revealed by ArcView Market Research indicate that the marijuana industry collected $4.2 billion from medical marijuana last year alone in the US. The research firm also projected that medical marijuana revenue will be more than $22 billion by 2020 courtesy of less stringent regulations. This market data is a good explanation for why GW Pharmaceuticals PLC NASDAQ:GWPH), one of the largest marijuana companies, is flying high since 2013.
The trend means that the pharmaceutical industry has identified that there are some huge business opportunities presented by the medical marijuana industry that override stigma and the danger of government harassment. Merck, Pfizer, Novartis AG (NYSE:NVS), and Sanofi SA (NYSE:SNY) among others will most likely take an alternative route by considering acquisitions. This is because the companies developing marijuana-based drugs have years of experience in the sector while Big Pharma has not touched it until now.
Natural health promoter NaturalSociety claims that marijuana might one day be used as an alternative to painkillers or antidepressants. Big Pharma companies have also been claiming that the chances of the US legalizing marijuana are slim but they still continue to carry out research on the plant. This suggests that they are also optimistic, and possibly hope to mislead the competition into thinking that there is no hope for marijuana-based treatment.
There are about 167 marijuana-based companies that would most likely be targeted for buyout deals. The firms are listed in the MJIC Marijuana Global Index, but only 12 of them are currently developing drugs using cannabinoids. OXIS International is one of the companies whose focus is to come up with treatments for fibromyalgia and cancer. A few other companies such as Cara Therapeutics Inc (NASDAQ:CARA) and GrowBlox Sciences are some of the most probable targets of acquisitions.
