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21st Century Cures Act A Huge Positive For The Cannabis Industry

By Jason Napodano

On December 7, 2016, the U.S. Senate passed the 21st Century Cures Act. President Obama said he plans to sign the bill into law as soon as it hits his desk. The Act, which is designed to facilitate FDA approval of new drugs and medical devices, is a major win for the Pharmaceutical and Medical Device industry, and its supporters such as PhRMA and AdvaMed. Industry spokespersons praise the Act as a way bring about more innovation and get treatments to patients faster. The bill passed by an overwhelming 94-5 and 326-24 majority.

The 21st Century Cures Act will enhance current FDA programs and allow for a quicker path for breakthrough pharmaceutical products targeting debilitating diseases with limited alternative treatment options.The measure aims to benefit people with chronic diseases, with areas of mental illness and opioid addiction / chronic pain getting specific attention. The U.S. NIH will get $4.8 billion in new funding to specifically focus on new cures and innovations in biomedical research.

A Big Win For The Cannabis Industry

Importantly, the Act directs the U.S. FDA to make decisions based on the use of “real world evidence” for approval of new indications for FDA-approved drugs. The use of observational studies, patient input, anecdotal data, and other retrospective research greatly reduces the cost and time to market compared to conducting large randomized clinical trials. This should increase the odds of success as the FDA may focus less on objective measures and prohibitively expensive placebo-controlled randomized clinical trials.

I can think of no other segment of the pharmaceutical industry that will benefit more from the Act than the cannabis industry. The medical benefits of marijuana, or more specifically, cannabinoids, are real. There is no shortage of literature supporting the medical benefits of cannabinoids. Hundreds of peer-reviewed publications exist linking therapeutic benefit in the treatment of mental health disorders like PTSD, Parkinson’s, Huntington’s, restless leg, epilepsy, multiple sclerosis, and traumatic brain injury. However, the most common uses of cannabinoids or medical marijuana are in glaucoma and in chronic and neuropathic pain. In fact, so accepted is the antiemetic effect of medical marijuana that it is now common practice for many terminally ill cancer patients.

That being said, despite the overwhelming real-world, observational, and anecdotal evidence of therapeutic effect to marijuana, U.S. FDA approval of synthetic cannabinoids tallies only two products and less than $200 million in sales. These are the antiemetic drugs Marinol® (dronabinol) by AbbVie and Cesamet® (nabilone) by Valeant/Meda. By signing the bill into law, President Obama is directing the FDA to look at therapeutic options like medical marijuana and synthetic cannabinoids and decide, “Is it safe and do people feel it works? If so, let’s get it approved and to patients as soon as possible!”

A Tremendous Opportunity

According to the Kim Foundation, 26% of American’s over the age of 18 suffer from some sort of mental health disorder, including depression, anxiety, OCD, PTSD, schizophrenia, bipolar disorder, and ADHD. That’s 60 million people! These are areas where medical marijuana is commonly used in the U.S. In fact, many states already approve the use of medical marijuana for conditions such as insomnia, epilepsy, depression, anxiety, and PTSD. The passing of the 21st Century Cures Act will allow biopharmaceutical companies to take this type of real-world data and expedite new or abbreviated drug applications for synthetic or purified cannabinoids targeting this enormous market.

According to data from the 2012 National Health Interview Survey (NHIS), 11.2% of American adults (~25 million people) have experienced some form of pain every day for the past three months. The study also found that even more people, nearly 18%, suffer from “severe levels” of pain. The NIH estimates over 2 million Americans take opioids on a daily basis. Nearly 80% will suffer from abdominal and GI related issues. The American Society of Addiction Medicine estimates 25% of chronic opioid users become addicted to the medications and suffer debilitating long-term health consequences.

As noted in the bar graph above, chronic pain is the most common use of medical marijuana in the U.S. today. The 21st Century Cures Act earmarks specific funding to fight the U.S. opioid epidemic and find new, innovative medications for patients suffering from chronic pain. I think cannabis will be at the center of this focus.


The U.S. government is making an effort to streamline the drug approval process for “known safe and effective” medications by passing the 21st Century Cures Act. The goal is to get medications that are used today by millions of patients for perhaps off-label or unapproved indications through the FDA process in an expedited manner. This potentially lowers the bar for approval and certainly reduces the cost and time small biopharma companies must spend to get through this process.

No area of the pharmaceutical industry seems better positioned to take advantage of this new law than the cannabis industry. The benefits of cannabinoids and medical marijuana are known throughout the world, and in the households of patients living in states with approved marijuana use in the U.S. Congress just sent a bill to the President that will allow cannabinoids to become common practice in the physician’s office and outpatient clinics as well. That is very exciting for cannabis investors.

Jason Napodano

Jason Napodano

I have been a professional equity research analyst and investor in biopharma stocks for the past two decades. I am a former bench scientist turned financial analysts. My company, BioNap, Inc., is an investor awareness and biopharma market research firm dedicated to helping both biopharma companies and investors make better decisions when it comes to investment in the healthcare industry.

I have significant experience in financial modeling and product competitive analysis. I previously worked for Zacks Investment Research covering the small and mid-cap biotechnology and specialty pharmaceutical industry between 2003 and 2015. Before Zacks, I spent three years on the buy-side with Eastover Capital in Charlotte, NC where I focused on large-cap equities, specializing in healthcare, energy, and technology.
Before joining Eastover, I worked as a research scientist for TechLab, Inc., a biotechnology company focused on developing diagnostic kits and vaccines for infectious diseases. I also spent a year working in a lab at the Fralin Biotechnology Center in Blacksburg, VA. I have a B.S. in Biochemistry from Virginia Tech and an M.B.A. with a concentration in Securities Analysis from Wake Forest University. I am a Chartered Financial Analyst (CFA).

This Post Has 2 Comments
  1. Hi Jason, Well written and well argued point of view. Perhaps we can work together in some way? I have 4 companies in the cannabis space, two up and running, two raising start-up funds. I recently wrote about the research published this year that showed CBD converts to THC in gastric fluid, and therefore oral dosing of CBD to children is dangerous. But many products are on the market with our FDA clearance doing exactly that and I wonder what you think of that situation. You can see more about me on linkedin at

  2. seems like grounds to have Sessions removed for deriliction of duty. Why has no one challenged him on the subject and his petty infantile puritanical views on cannabis.

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