Could Pot for Pets Help Marijuana Stocks?

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Move over, humans; the cannabis industry may be handed over to the dogs.

While marijuana stocks investors are finding plenty of investment opportunities among the growing industry, one area they likely haven’t thought about is the marijuana market for pets.

Recent results from a study at Cornell University College of Veterinary Medicine found that cannabinoids can not only treat people with osteoarthritis and joint pain, but, also dogs. In the study, dogs with OA and pain in multiple joints experienced significant improvement receiving a blend of hemp oil, in comparison to the dogs receiving a placebo. Currently, a similar study of the use of cannabinoids with cats is underway.

There is no lack of excitement over the spreading legalization of medical cannabis worldwide, not to mention the opening of Canada’s legal adult use market slated for this year.

Nonetheless, investors in marijuana stocks should pay attention as pharmaceutical development for animals is in the throes of rapid growth. 

In other words, it’s big business. Zoetis (NYSE: ZTS), the largest among animal health companies, reported revenues last year exceeding $5 billion. Not too far behind, the animal health sector of Merck (NYSE: MRK) posted revenues last year of $3.9 billion.

The companies developing the drugs are not the only ones profiting well. Pet pharmacies – among them, PetMed Express (NASDAQ: PETS), the largest in the U.S. – have been seeing significant growth in sales and revenues.

What is causing this rise in pet pharmaceuticals?

Well, more and more Americans of younger and older generations are turning to pets for companionship, increasing the number of households in the U.S. that care for more than one pet. Internationally, the numbers of middle-class populations that own pets in larger countries, like China and India, are also increasing.

Marijuana stocks investors should note that not all of the financial gains in the animal health industry come from pet products.

A large number come from the sale of livestock products, as is the case for Zoetis, accounting for 55% of their total revenue. Altogether, an estimated two-thirds of Zoetis’ sales stem from anti-infectives, vaccines and parasiticides, which are not all relevant to cannabinoid development.

This does not, however, negate the possibilities for cannabinoid development in pet pharmaceuticals, as the Cornell study results indicated. According to some veterinarians, the development of cannabinoids in the treatment of animal pain may be “a game changer that will change the face of veterinary medicine.”

Still, how does this translate to opportunities for marijuana stocks investors?

There are several small animal health companies focused on cannabinoid remedies with marijuana stocks traded in OTC markets.

The hemp oil blends used in Cornell’s study were made by a privately held company, Ellevet Sciences, which presently takes it off the table for investors.

However, Tetra Bio-Pharma announced last year their development plans for veterinary cannabinoids. Phyto Animal Health, a subsidiary of Medical Marijuana Inc (NASDAQOTH: MJNA), is focused on developing and marketing cannabinoid-based pet products. The downside with both are the investor risks inherent in penny stocks which should be scrutinized when seeking marijuana stocks to buy. 

The aforementioned big players (Zoetis and Merck) in the animal health industry have not expressed current plans for researching cannibinoids, though it may be a consideration in the future. Which leaves us wondering if some of the larger biotech companies will pick up the ball and focus some of the attention of their existing cannabinoid programs to opportunities in the animal health market. Among them, GW Pharmaceuticals (NASDAQ: GWPH) has already involved animal subjects in extensive testing of its CBD and CBVD products, though there has been no hint of plans to expand into veterinary pharmaceuticals.

The potential cannabis market for pets is likely ahead of its time leaving it largely unnoticed by investors researching marijuana stocks to buy.

If it’s taken this many years for a wider acceptance of medical cannabis for humans, it’s going to take even longer for animals. We’re still one FDA decision away – hopefully June 27 – from our first FDA-approved MMJ drug. But, the day is likely coming when investors will find profitable cannabinoid opportunities in the animal health market. For the time being, marijuana stocks investors may want to hang back and watch for future developments.

(For information on recommended pot stock investments, read Weed Stocks Projected to Do Well in 2018.) 

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