Solving the Drug Crisis with…More Drugs?

The United States are in the middle of an opioid epidemic.

According to CNN, there are more than two million Americans dependent on opioids.

In fact, things have gotten so bad that US President Donald Trump has declared the opioid crisis a national health emergency.

If you are not familiar with opioids, they are a type of drug that can be very addictive. These can include legal painkillers and illegal drugs.

In the last years, legal opioids have become more common, as doctors increased prescriptions to treat chronic or severe pain. According to Reuters, about one third of the US population suffers from chronic pain.

In 2016, there were more than 63,600 drug overdose deaths in the US. Opioids were involved in more than two thirds of those deaths.

In the map below, you can see the extent of the epidemic per state.

In 2016, there were more than 63,600 drug overdose deaths in the US. Opioids were involved in more than two thirds of those deaths. 03-04-2018


Source: Denver Post
[Click to enlarge]

Is medical marijuana the answer to the opioid crisis?

While the state of Colorado is not one of the worst affected states, its battle against opioids is a serious problem.

Yet in Colorado, it looks like the trend may be reversing. That is, opioid overdose deaths have been decreasing.

Why?

Well, it could have something to do with cannabis.

As Newsweek reports, a study from the American Public Health Association recently looked at the relationship between recreational marijuana and opioid deaths. It found that after Colorado legalized recreational marijuana in 2014, opioid linked deaths decreased by 6.5%.

Coincidence?

Maybe.

The authors point out that while there is no real evidence, there is an association between the two.

Another study, published in the Journal for the American Medical Association (JAMA), found that states with medical cannabis laws had a 24.8% lower mean rate of opioid death overdoses per year. And the effect seems to grow stronger overtime.

Yet both studies agree that we need more research.

One of the most common reasons that people look for medical marijuana is to treat chronic pain. That is, the same reason why people are getting opioid prescriptions.

As Live Science recently reported:

A growing body of evidence suggests that cannabinoids — chemical components in Cannabis plants or certain synthetic compounds — can be effective in alleviating pain, either alongside or in place of opioids.

That is, there is more data coming forth to suggest that we could use cannabis to fight against the opioid crisis.

I mean, don’t get me wrong, marijuana also has its risks. Yet the risks of opioids are far greater.

As Live Science continued,

Marijuana has been shown to produce mild dependence in people; cannabinoids affect brain processes that regulate rewards and reward-seeking behavior, much as other addictive substances, such as opioids, do, scientists reported in a study published in 2007 in the journal Dialogues in Clinical Neuroscience.

‘But unlike opioid dependence, marijuana dependence can generally be reversed through cognitive behavioral [sic] therapy and abstinence without debilitating withdrawal symptoms such as vomiting, diarrhea, insomnia and anxiety, according to the study.

What countries are on-board with legalising medical marijuana?

Marijuana has been illegal around the world for a very long time. But it is now experiencing a wave of legalization.

In the US, 29 states plus Washington DC have already legalized medical marijuana.

Yet, while US states have been legalising medicinal cannabis, the federal government still considers marijuana a ‘schedule 1’ substance. That is, a drug with no ‘currently accepted medical use’.

Which could mean that marijuana-based painkillers could take a while to hit the market.

The US is not the only country legalising cannabis.

In 2016, as you may know, the Australian federal government legalised the sale of medicinal marijuana.

Uruguay, the Netherlands, Germany, and Israel — among others — have also legalised or decriminalised pot in some form.

But leading the pack is Canada.

Some of the biggest marijuana companies are based there. Many even trade on the Toronto Stock Exchange and more recently, in the US NASDAQ.

Canada legalised marijuana for medicinal use back in 2001. Now the country is looking to legalise its recreational use by July 2018.

Why are governments legalising it now?

As our editor Sam Volkering told me:

For decades marijuana (cannabis) has been a classified narcotic — a “hardcore” drug. Don’t get me wrong, it’s still a mind-altering drug when THC content cannabis is ingested, but it’s far from hardcore in my view.

Yet in the US it’s historically been on the same Class A classification as heroin. But that’s all changing. With research primarily coming from Israel, the world started to open its eyes to the potential of cannabis.

You see even humans have what’s called an endocannabinoid system. These are a bunch of receptors in the brain. And now with new technology and new biotech research there is immense progress in the understanding of what cannabis can do to benefit humans and make use of that endocannabinoid system.

We’re now starting to see cannabis as a beneficial medicine rather than a prohibited drug — that’s a monumental shift.’

As a formerly illegal industry, investing in cannabis can be very risky. It is a new industry starting from scratch, and the government could take licenses away at any moment.

But it pays to take notice.

Cannabis, usually an illegal drug, is experiencing a global trend of legalisation. And it is giving us the extraordinary opportunity to watch firsthand the birth of a (potential) multimillion dollar industry.

Until tomorrow,

Selva Freigedo,
Editor, Markets & Money

PS. If you are interested in investing in medicinal cannabis stocks, Sam has identified a small group of ‘legal drug dealers’ making big money in this space. He has recommended these stocks in his Australian Small-Cap Investigator service. To find more about it, click here.


Selva Freigedo is an analyst with a background in financial economics. Born and raised in Argentina, she has also lived in Brazil, the US and Spain. She has seen economic troubles firsthand, from economic booms to collapses and the ravaging effects of hyperinflation, high unemployment, deposit freezes and debt default. Selva now writes from her vantage point here in Australia. She is lead Editor at the daily e-letter Markets & Money. And every week, she goes through each report and research note produced by our global network of trusted advisors to find the best investment opportunities for you in Australia and overseas. She packages these opportunities for you in Global Investor.


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