In 2017 72,000 people died from drug overdoses, a 10% increase from the previous year according to the Centers for Disease Control and Prevention (CDC).
Opioids, or painkillers, made up 45,000 of those deaths and are the leading cause of the rising overdose rate.
The opioid epidemic continues to be a major problem facing governments in North America, but there is a light at the end of the tunnel.
Early clinical data, academic studies and patient surveys are finding cannabis could be a viable replacement for opioids to treat all types of pain conditions.
With opioids making up $14 billion of spending in the US, three times larger the cannabis market in Canada, the opportunity for cannabis to take prescription market share from opioids could be a lucrative one for marijuana investors.
Benefits of Cannabis Over Opioids
A recent study done by UC Berkley and Hello MD, a medical marijuana website, found medical marijuana patients have much better outcomes than when they used opioid painkillers instead.
70% of survey respondents thought cannabis side effects were more tolerable than painkillers and only 18% disagreed that cannabis is better at treating their pain than opioids.
This data is powerful and supports the continued use of cannabis as an opioid substitute.
The survey included only 3,000 marijuana users so larger data sets are needed, but early indications are that cannabis could be a safe and viable substitute.
Cannabis Use is Proven to Lower Opioid Prescriptions Rates
A study by professors at Emory University and University of Kentucky found that when a state legalized medical marijuana, government healthcare plans prescribed up to 6 percent less painkillers.
In another study, professors from the University of Georgia found that legal states saw an 8.5 percent reduction in daily opioid doses filled for citizens with government-sponsored healthcare.
If the state allowed medical dispensaries the decrease was even higher at 15% less painkillers prescribed compared to non-legal states.
Other clinical studies from Israel found that elderly patients reported less pain when using marijuana with opioid medication and a significant increase in the reported quality of life.
1 in 5 patients in the study reduced their dosage or stopped taking opioids altogether.
Cannabis is Far Safer than Opioids
The United States Drug Enforcement Administration, also called the DEA, reported in 2017 that there have been no reported deaths from a marijuana overdose.
In contrast there were 45,000 opioid deaths in 2017 alone.
If the DEA, one of the strongest opponents of marijuana use, admits it is not deadly, you can be relatively confident of its general safety.
Two Ways to Invest in the Transition from Opioids to Cannabis
The best way to invest in the transition away from opioids is to buy the companies spending the most to discover new ways to alleviate pain with the cannabis plant.
The chart below includes five of the cannabis biotech stocks spending the most on research.
These companies are the high risk, high reward way to invest.
They are spending significantly more than licensed producers on research, but have little to no revenues and only a few years of cash on hand for most.
R&D Spending and Years to Run out of Money at Current Spending Rate
In contrast, a lower risk way to play cannabis research is with a licensed producer who will generate more cashflow from growing and selling cannabis while at the same time researching new medical uses for the drug.
To help investors choose, we’ve put together a list of the 11 largest licensed producer R&D budgets and these budgets as a percentage of revenue.
The R&D budget alone is useful, but if you compare the budget as a percent of revenue it will tell you how committed each company is to building a business around pharmaceutical products in addition to recreational marijuana.