Second of two articles

Medical marijuana generated more than $4.2 billion in revenue in the U.S. in 2015, according to ArcView Market Research. And they forecast it will surpass $22 billion by 2020, as regulations continue to loosen and patient access increases.

So why is GW Pharmaceuticals Plc (NASDAQ: GWPH), the largest pharma company with a relatively modest market capitalization of $2 billion, developing marijuana-based drugs? Where are Pfizer (NYSE: PFE), Novartis (NYSE: NVS), Merck (NYSE: MRK), Sanofi (NYSE: SNY) and the rest of their Big Pharma

First of a two-part series

“I Want to Take You Higher.”

Pharmaceutical companies developing cannabis-based drugs just might be serenading investors with this 1969 hit single by the group Sly and the Family Stone.

But a word of caution to those banking on marijuana drugs to be the blockbusters that send share prices zooming. You could see your investment “go to pot.”

That’s because a lot of heavy lifting still needs to be done before marijuana proves its medical mettle. Look no further than in an editorial titled “Medical Marijuana: Is the Cart Before the Horse?”, which appeared in the

To date, 39 U.S. states have legalized cannabis for medical use. Total industry revenues during 2015 came in at $4.4 billion. A March report from financial advisory firm Ackrell Capital suggests prohibition will lift entirely by the end of this decade, and the medical marijuana space will be worth an annual $50 billion within 10 years.

This is not a standalone expectation.

Also in March, the Marijuana Business Daily forecasted a high end of $44 billion in economic impact from the cannabis industry by 2020, accounting for both recreational and medicinal consumption.

For the first time in the

Kyle Bass (Trades, Portfolio) of Hayman Capital Management sold 11 health care-oriented stakes in the fourth quarter, the most noteworthy being the divestiture of his 606,618-share stake in Impax Laboratories Inc. (IPXL), a Hayward, California-based pharmaceutical company.

Bass sold the stake for an average price of $40.13 per share. The transaction had a -9.86% impact on Bass’ portfolio.

Alan Fournier (Trades, Portfolio) is Impax Laboratories’ leading shareholder among the gurus with 2,321,581 shares in his portfolio. The stake is 3.2% of Impax Laboratories’ outstanding shares and 2.53% of Fournier’s total assets.

Impax Laboratories has

Health care stocks are the most heavily weighted stocks in [url=http://www.gurufocus.com/StockBuy.php?GuruName=Kyle+Bass]Kyle Bass[/url] ([url=http://www.gurufocus.com/StockBuy.php?GuruName=Kyle+Bass]Trades[/url], [url=http://www.gurufocus.com/holdings.php?GuruName=Kyle+Bass]Portfolio[/url])’ portfolio so it is no surprise that health care-related stocks would hold prominent positions in his third-quarter transactions.

Bass’ most significant third-quarter transaction was the sale of his 836,593-share stake in Perrigo Co. PLC (PRGO), a pharmaceutical company with offices in Dublin and Allegan, Mich., for an average price of $183.44 per share. The deal had a -18.25% impact on Bass’ portfolio.

Perrigo has a market cap of $22.03 billion and an enterprise value of $26.88 billion. It has a P/E of 151.2, a forward P/E

Guru Kyle Bass (Trades, Portfolio) is a great investor, and I really like his investment philosophies. Most recently I read the book "Money" by Anthony Robbins, in which he interviewed Bass. He asked him, "What’s most important to winning?" and Bass replied, “Hunger and pain. Hunger comes from pain; you don’t get really hungry when it’s been easy." He then went on to say, “Luck is where preparation meets opportunity.”

Recently Bass bought 1,281,434 shares in CF Industries Holdings Inc. (CF), Impax Laboratories Inc. (IPXL) and GW Pharmaceuticals (GWPH).