Welcome to my latest Weekly Weed Report. Below are edited excerpts; the video provides charts and greater details.

The race for “Cannabis 2.0” has been heating up and it’s poised to be one of the most disruptive trends in the marijuana industry in 2023 and beyond.

Big Pharma has made huge strides in recent months to “medicalize” cannabis. That is, mainstream biotech companies are synthetically creating cannabis compounds in the lab that perform just like medicine: uniform, repeatable, and specifically dosed. Mary Jane in a pill.

Pharmaceutical companies using synthetic cannabinoids in their drug compounds assert that it’s the optimum approach for ensuring consistency and high quality in the product.

Don’t forget a basic fact: marijuana is just a plant. It’s a commodity. As such, growing marijuana or squeezing various oils from the plant aren’t the surest ways to profit from the “green rush.”

As legal restrictions against marijuana are increasingly removed, weed is becoming commoditized and subject to downward price pressures. The most profitable companies in the marijuana industry will be those that develop a proprietary technology that they can patent.

It’s a cycle we’ve seen inevitably unfold in countless other industries. The spoils go to the innovators with breakthrough technologies that disrupt the status quo. The future of marijuana belongs to the “disruptors,” those companies that provide a unique value add to the agricultural commodity known as marijuana.

For the past 20 years, the biotech and biopharma industries have been at the forefront of making new discoveries and turning those discoveries into patentable medications. Life-changing wealth awaits investors who get ahead of the curve.

Cannabinoids are compounds found in the cannabis plant or synthetic compounds that can interact with the endocannabinoid system. The most notable cannabinoid is tetrahydrocannabinol (THC), the primary intoxicating compound in cannabis.

Synthetic cannabinoids contain none of the impurities associated with plants such as mold, pesticides, insect infestation, harsh extraction solvents, and heavy metals such as lead. Marijuana growing techniques sometimes entail the use of carcinogenic materials.

Marijuana users underestimate the extent to which natural marijuana can get contaminated, especially as regulations remain in the nascent stage. Synthetic cannabis solves this problem.

Creating cannabinoids in the lab, versus growing plants, also makes it easier and cheaper to increase the scale of manufacturing capacity. Companies aren’t subject to the vagaries of growing seasons or the risk of losing crops.

Another problem with natural marijuana is banditry in agricultural fields, which requires the deployment of costly security measures. Sometimes, marijuana thieves even resort to violence.

Barriers to entry…

Synthesizing cannabinoids also is a faster, cheaper way for drug companies to navigate the approval process of the U.S. Food and Drug Administration (FDA).

The FDA’s approval gauntlet is costly and time-consuming. It takes on average 12 years and over $350 million to get a new drug from the laboratory onto the pharmacy shelf.

The process is especially difficult for marijuana biotechs, because marijuana is banned on the federal level and sufficient quantities of the natural plant aren’t always readily available.

To date, the FDA has only approved three cannabis-related drug products. These approved products require prescriptions…and they’re all synthetic.

It won’t surprise you to learn that it’s not possible to patent naturally occurring compounds such as THC or cannabidiol (CBD). That would be like trying to patent Vitamin C, peanuts, or coconut milk.

Most materials nature gives us for free are non-starters with the U.S. Patent Office. But what can be patented is a process to synthesize cannabinoids. And that’s one of the most exciting areas of marijuana investment today.

If you want to tap the massive profits up for grabs in marijuana but don’t know where to start, consider my new book: The Wide World of Weed and Psychedelics.

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John Persinos is the editor-in-chief of Marijuana Investing Daily. You can reach him at: mailbag@investingdaily.com

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