Over the past couple of years, medical marijuana gained widespread acceptance and attracted a lot of business interest. Could it be a case of premature celebration?
When several U.S. states legalized cannabis for medical use, it triggered a slow but inevitable discussion about healing properties of this plant. A number of studies emerged demonstrating the usefulness of marijuana for treatment of a broad group of ailments, and many different jurisdictions granted exceptions from drug laws for certified medical users. In short, everything was going so well that investment firms started recommending this industry to venture capitalists with ambitious plans. It now appears that we should wait a little bit before declaring a victory.
The results of a recent study could cast some of the enthusiasm about medical cannabis in doubt. Researchers at the Yale University School of Medicine reviewed a large number of existing studies and came to the conclusion that marijuana may not be much more effective than placebo in treatment of some conditions that were supposed to be its primary areas of impact. While cannabis was confirmed to help with pain reduction, muscle spasms and stiffness associated with multiple sclerosis, it failed to meet expectations when nausea from chemotherapy and Tourette’s syndrome are concerned. This comes as a big surprise, and questions some of the key arguments for legalization of medical cannabis.
Aside from these doubts, the industry could be facing other obstacles before reaching completely legitimate status. Despite being legal for medical purposes in 23 states, U.S. government still considers marijuana to be a scheduled substance on the federal level. With no plans to change legal status of cannabis in the near future, serious investors might remain cold to the idea of supporting a business that could be wiped out by a single decision of the federal government. Access to banking services is also an issue for medical dispensaries, while tax regulations additionally complicate the picture. Larger companies – like GW Pharmaceuticals that produces the cannabis-based Sativex spray, might be able to cope with all the roadblocks, but profitability of local dispensaries is far more doubtful.
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