Roy Bingham, CEO of BDSA, anticipates substantial growth in the U.S. cannabis market, projecting sales to reach nearly $46 billion by 2028.

This growth would be primarily fueled by the expansion of adult-use markets and adoption of new licensed and regulated markets, both medical and recreational. Key states driving this surge include New York, New Jersey and potentially Florida and Ohio, Bingham says.

Influence Of DEA Rescheduling

Following the DEA's decision to reclassify cannabis to Schedule III, Bingham predicts this will open up new avenues for medical research and investment. "We expect major medical discoveries within five years," he stated, highlighting the potential for new pharmaceutical applications and a diversification of medical cannabis products.

Bingham notes that the rescheduling will be a game-changer for research, allowing scientists to pursue careers studying cannabinoids without risking their careers. "For the last 50 years, studying cannabinoids was a career ender for young scientists. Now, they will be able to pursue it and come up with fascinating discoveries."

Economic And Operational Impacts

The rescheduling is likely to alleviate financial pressures on cannabis businesses, notably by eliminating certain tax burdens, which Bingham says will "inject much more cash and capital into the industry."

This financial liberation is expected to accelerate research and development, particularly in medical cannabis, potentially attracting substantial investment from healthcare and pharmaceutical companies. He also anticipates healthcare and pharmaceutical companies to start investing in cannabinoid research, further driving growth in the sector.

Challenges And Opportunities Ahead: Impact Of Cannabinoids

Despite these optimistic projections, Bingham noted the ongoing federal restrictions, such as the ban on interstate cannabis product shipments, which he does not see changing anytime soon.

However, he said research opportunities enabled by the rescheduling will lead to a broader understanding of cannabis, potentially impacting the healthcare and pharmaceutical industries significantly.

"We expect healthcare companies to start looking at the real-world data more carefully and recognizing the impact of cannabinoids on reducing the use of other medications," he said.

"Pharmaceutical companies are likely to see this as an opportunity and will put their resources and capital behind cannabinoid research," he added.

He also highlighted the potential for significant changes in the investment environment. "When you start to see that cannabinoids are reducing pharmaceutical consumption, you will see a big change in the investment environment," Bingham said. This shift could lead to increased funding for research and development, further driving innovation in the cannabis sector.

Bingham stressed the importance of establishing brand value within the cannabis industry, noting that it is still early days for many brands. "What's going to influence the value of these companies is when they have products that consumers are willing to pay more for because they trust the brand."

Finally, Bingham mentioned the role of consumer packaged goods (CPG) companies. "CPG companies, which are all about branding, will start to see significant opportunities in the cannabis market as more top players establish their brands," he noted. This involvement from CPG companies could further legitimize and expand the market, making cannabis products more mainstream and accessible.

Main Pharmaceutical Players In Cannabis

These are the main publicly traded pharmaceutical companies with cannabis investments:

  • Jazz Pharmaceuticals (JAZZ  ) acquired GW Pharmaceuticals, which developed Epidiolex, the first FDA-approved CBD medication for epilepsy.
  • AbbVie Inc. (ABBV  ) markets Marinol (dronabinol), a synthetic cannabinoid used to treat nausea and vomiting caused by chemotherapy and weight loss in AIDS patients.
  • Pfizer Inc. (PFE  ) acquired Arena Pharmaceuticals, which has a pipeline including cannabinoid-based therapeutics.
  • Corbus Pharmaceuticals Holdings, Inc. (CRBP  ) focuses on developing and commercializing therapeutics to treat inflammatory and fibrotic diseases using cannabinoid receptor type 2 (CB2) agonists.
  • Zynerba Pharmaceuticals, Inc. (HRMY  ) develops synthetic cannabinoid therapeutics for transdermal delivery for treating neuropsychiatric conditions.
  • Amyris, Inc. (AMRS  ) uses synthetic biology to produce cannabinoids through fermentation processes, aiming to create sustainable and pure cannabinoid products.
  • Cardiol Therapeutics Inc. (CRDL  ) develops cannabidiol-based anti-inflammatory therapies for heart diseases and other conditions.
  • Intec Pharma Ltd. (NTEC  ) develops innovative oral drug delivery systems, including cannabinoid-based therapies.