Even pharmaceutical companies are celebrating marijuana rescheduling.
Firms making cannabis-based drugs say the U.S. Justice Department’s reclassification of medical marijuana as a Schedule 3 drug could improve their access to private funding and public markets, according to Reuters.
In the past, strict federal rules and the stigma surrounding cannabis kept investors and banks on the sidelines, even for U.S. Food and Drug Administration-approved pharmaceutical formulations.
But with rescheduling, investors and financial institutions that previously worried about the stigma surrounding marijuana are taking another look, leading pharma companies to eye IPOs, Reuters reported.
Is cannabis rescheduling good for Big Pharma?
Companies already jumping at the opportunity include Ananda Pharma, which is working on a cannabis-based treatment for endometriosis pain and hope to raise as much as $20 million from private investors.
“We have calls lined up already with a VC investor interested in endometriosis and with a significant U.S.-based family office,” said Ananda CEO Melissa Sturgess, a past speaker at MJBizCon, according to Reuters.
Avicanna, which develops drugs for rare seizure disorders, has had to conduct much of its research in Canada because U.S. regulations were so tough.
But with the new rules, Avicanna sees a chance to expand in the U.S., running more local trials and even considering an initial public offering on a major stock exchange, Reuters reported.
The major gating factor here has been the fact that there was no federal pathway to enter without a substantial amount of investment or red tape,” Avicanna CEO Aras Azadian told Reuters.
How will rescheduling make cannabis R&D cheaper?
IGC Pharma is another company keeping monitoring the changes. It’s testing a liquid, low-dose THC treatment for Alzheimer’s agitation, with an eye toward a potential $50 million raise later this year.
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Rescheduling also is likely to make research and development much cheaper and easier.
Before, companies had to deal with all sorts of red tape to get small amounts of THC for studies. With those barriers coming down, it will be easier and less costly to run studies in the U.S.
“A room full of marijuana plants could generate enough THC for thousands of patients,” IGC CEO Ram Mukunda told Reuters.
Mukunda noted the company had to grow “acres and acres” of hemp to get the same amount.
