Better Know a Marijuana Stock: Axim Biotechnologies

Forgive the pun, however the authorized cannabis business is rising like a weed, and marijuana shares traders are starting to take discover.

Regardless of your supply, authorized pot gross sales are hovering. Cannabis analysis agency ArcView is projecting progress in North American authorized gross sales to greater than $22 billion by 2021 from $6.9 billion in 2016, whereas Marijuana Business Daily's new report, "Marijuana Business Factbook 2017," is asking for roughly a tripling in U.S. authorized weed gross sales to greater than $17 billion by 2021. Considering how a lot marijuana remains to be being bought on the black market, traders view this chance to sway shoppers to authorized channels as a regular future progress supply.

Image supply: Pixabay.

Unfortunately, there are additionally dozens of marijuana shares for traders to select from. Considering that feelings surrounding these shares are working excessive, traders could possibly be shopping for in for all of the fallacious causes, or worst of all, with out absolutely understanding the dangers plaguing the weed business.

With this in thoughts, we're taking the time to dissect one marijuana inventory every week till we have coated the entire main gamers (i.e., these with $200 million market caps or larger). Here are the weed shares we have mentioned thus far:

Today, we will take a nearer take a look at Axim Biotechnologies (NASDAQOTH:AXIM).

What Axim Biotechnologies does

New York-based Axim Biotechnologies continues an ongoing string of cannabinoid-based drug builders that we're analyzing. Its analysis primarily revolves across the therapy of ache, spasticity, and irritation, although it has research regarding a number of sclerosis (MS) and Parkinson's illness as nicely.

Axim is trying a variety of supply strategies to get cannabinoids into the physique, together with through chewing gum, floating capsules, topical purposes, ophthalmic preparations, and even a suppository for inflammatory bowel illness (IBD) sufferers.

Image supply: Getty Images.

Promise and alternatives

The promise Axim brings to the desk will be seen within the breadth of its pipeline. While we have examined a variety of cannabinoid-based drug builders which have simply a single compound in growth, Axim has round a half-dozen merchandise in growth being examined in 15 separate preclinical and scientific research. A majority of those indications are wide-ranging, which means an approval from the Food and Drug Administration would imply entry to a massive pool of sufferers. Diseases like MS, IBD, psoriasis, Crohn's illness, stressed much less syndrome, dementia, Parkinson's, glaucoma, dry eye, and so forth have big affected person swimming pools and huge advertising and marketing potential.

Axim additionally has a very massive investor in its nook, Medical Marijuana, Inc. (NASDAQOTH:MJNA), that would present added know-how to assist Axim get its product portfolio off the bottom. Medical Marijuana, Inc., the primary publicly traded marijuana inventory, owns 22.67 million shares of Axim, or about 43% of the corporate. Therefore it has some fairly huge sway in figuring out the place Axim's analysis is headed subsequent. For occasion, in March, Medical Marijuana, Inc. and Axim introduced that they'd contracted out Ora to run the corporate's upcoming preclinical growth and scientific trials for glaucoma and dry eye for AX-1603 and AX-1606, respectively. 

Public opinion additionally favors Axim. According to the unbiased Quinnipiac University Poll in February, some 93% of respondents favor the nationwide legalization of medical cannabis in comparison with simply 6% who oppose the concept. With such overwhelming help, and a have to crack down on an opioid epidemic within the U.S. that claimed greater than 20,100 lives in 2015 through prescription opioid overdose deaths, Axim's analysis into cannabinoid-based medicines could possibly be cheered on by traders and Wall Street.

Image supply: Getty Images.

Risks and issues

However, no marijuana inventory is ideal, and Axim has loads of potential issues.

Probably essentially the most obtrusive concern is Axim's present stability sheet. Even with a sizable investor in Medical Marijuana, Inc., it ended 2016 with a meager $zero.7 million in money available and a product pipeline full of greater than a dozen-and-a-half mixture pharmaceutical and nutraceutical trials. It would seem that Axim has nowhere close to the capital wanted to run its scientific research, which most likely means dilutive share choices will finally be wanted to shore up its stability sheet.

Secondly, Axim's share value has risen by greater than three,500% over the trailing 12-month interval, but we have not actually seen something in the way in which of efficacy from its scientific research. Nearly all of its present research are within the preclinical levels, or they're simply stepping into part 1 enrollment for security and dose-finding functions. Its most superior trial is its part 2 examine evaluating the effectiveness of its CanChew Plus cannabidiol (CBD)-based chewing gum for irritable bowel syndrome. The examine has simply 40 sufferers, who will obtain both six items of gum containing 50 mg of CBD per day or a placebo. Essentially, traders are shopping for blind in the intervening time.

Another clear concern is that Axim is buying and selling on the over-the-counter (OTC) exchanges. To be honest, the OTC exchanges have carried out a higher job of beefing up reporting requirements lately, but it surely's nonetheless not excellent. Finding up-to-date monetary info on pot shares like Axim will be robust at occasions. What's extra, despite the fact that it is absolutely authorized if disclosed (which it was), Axim lately paid an investment firm to provoke protection on its inventory. Again, whereas completely authorized, seasoned traders typically frown upon such a transfer, which is seemingly designed to "pump up" a firm's valuation.

Image supply: Getty Images.

Should you purchase Axim Biotechnologies?

Of course, the large query on the finish of the day is, do you have to purchase Axim Biotechnologies?

On one hand, you get what's arguably the deepest pipeline of the bunch amongst cannabinoid-based drug builders. You additionally get a variety of totally different purposes, which is what I imagine offers Axim such an attract to traders. Not to say it has Medical Marijuana, Inc. in its nook.

On the opposite hand, it has nowhere close to sufficient capital to run its scientific trials, and can doubtless be dropping cash for the intermediate future. There's additionally little empirical proof that any of Axim's mental property really works. We have not actually seen what any of its experimental therapies can do in human research, which implies a lot might nonetheless go fallacious.

While this Fool is fairly set on suggesting you keep on the sidelines with all marijuana shares in the interim, I am notably involved about Axim and its lack of funding and early stage pipeline. I imagine traders are taking part in with hearth right here and would urge critical warning.

Sean Williams has no place in any shares talked about. The Motley Fool has no place in any of the shares talked about. The Motley Fool has a disclosure policy.

Better Know a Marijuana Stock: Axim Biotechnologies