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Amber Harris
Amber Harris
Articles (133) 

Companies Respond to Shift in Medical Marijuana Treatment in Canada

January 16, 2015 | About:

Over the past nine months, Canada has experienced a shift in the medical marijuana (or, marihuana, as it is spelled in Canada) industry's protocol. Although using cannabis for treatment has been legal in Canada since 2000, Health Canada was under a lot of pressure from the court system to make it easier for patients to gain access to medical marijuana.

Patients who once had to go through a long process of filling out an application to Health Canada to receive a license to either grow marijuana, designate a personal grower, or purchase cannabis from Heath Canada, can no longer consider the first two options to gain access to the medication. With the new system, called the Marihuana for Medical Purposes Regulations (MMPR), Health Canada licensed 23 producers of Cannabis.

Can this be an opportunity for investors, or is it "a deep chasm of value destruction?"

A couple of companies have reacted to the medical marijuana trend by shifting their attention away from their original business and are now focusing on contributing to the distribution of cannabis for medical purposes.

Lexaria Corp (LXRP), currently priced at $0.10, was once a company that developed oil and natural gas in North America. Now, however, the company noticed the spike in approved medical marijuana patients by Heath Canada and shifted its concentration. According to the company's State of the Nation(s) letter on the website, 37,359 patients were approved to utilize the cannabis program in 2013. 58,000 were projected to be approved for 2014 and 450,000 this year. 7% of the doctors in the country have written prescriptions for medical marijuana to treat any condition seen fit.

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As shown in the chart above, there has been an increase in insider buys recently. Christopher Bunka, President and 10% owner, bought a total of 1,245,122 shares last December.

Last month, Supreme Pharmaceuticals Inc. (SL) reported the company's security and infrastructure upgrades at its greenhouse facility located in Kincardine, Ontario and the facility was ready for Health Canada's inspection. The company previously explored gold and base metal.

The company's stock is currently $0.31 with a financial strength ranking of 6 out of 10 due to having an F-Score of 3, a Z-Score of 2.34 and no debt. SL's profitability and growth score is a 4.

About the author:

Amber Harris
Assistant Editor at GuruFocus.com


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