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It is said that major pharmaceutical companies lose billions every time the country legalizes weeds

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A recent study found that legalizing cannabis could cost pharmaceutical companies billions in sales and market share. Here’s why.


new Show data That when a new state legalizes medical cannabis or adult use, drug companies operating in that state take a big hit in the stock market.

For the study, researchers compared stock yield data from 45 major “legalization events” across California, Oklahoma, Michigan, Mississippi, and Virginia between 1996 and 2018, and defined a “legalization event” as “the day a state’s governor signed cannabis (legalization) or voters approved it.” The ballot initiative to legalize cannabis, whether medical or recreational.”

The findings revealed that the legalization of cannabis in those states coincided with a 1.5-2% drop in stock prices for giants like Purdue Pharma and Pfizer, among others, amounting to nearly $3 billion in lost sales and nearly $10 billion in lost sales. market share losses. for the industry as a whole.

After analyzing stock market data recorded in the immediate aftermath of the legalization of cannabis in legal states, the researchers observed a statistically significant decrease in the revenues of major pharmaceutical companies. The study authors said the trend “continued within 20 business days after” legalization, resulting in billions in market share losses, and a decline in Big Pharma’s post-certification sales.

This is what the new data tells us

opiate cannabis
When faced with a choice between opioids and cannabis, many patients turn green. This does not seem to bode well for drug companies. (leaf fly)

The study was conducted by the University of New Mexico Department of Economics with the assistance of the Department of Finance at California Polytechnic State University.

Ziemowit Bednarek and Sarah Stith, the authors credited for the report “US Cannabis Laws Projected to Cost a Billion Generic and Branded Drug Companies,” estimate that full federal cannabis legalization could lead to an 11% reduction in sales of conventional pharmaceutical drugs. They also found that legalization of cannabis use for adults affected businesses twice as much as medical marijuana legalization during 1996-2018.

The authors note that producers of brand-name drugs were more affected than producers of generic drugs. This indicates that Big Pharma’s brands are most affected by the legalization of cannabis at the state level.

The study concluded that drug companies should invest in the legal cannabis market rather than advocate against federal legalization. However, most major companies have taken a different approach that completely deviates from legal cannabis entirely.

Some companies are lobbying against legalization

Purdue Pharma and Pfizer are two of the many giant drug companies actively fighting against federal cannabis legalization. in MarchPurdue paid $6 billion to settle lawsuits over its role in fueling the opioid epidemic.

Purdue Pharma and Pfizer are both members of the American Drug Control Community Coalitions (CADCA), which also includes the newspaper group Gannett, NFL, which is proud of the world. Most Valuable Sports Teamand a few healthcare and pharmaceutical companies legalization conflict.

black cannabis magazine Imagine Partner List In a graphic that went viral this summer, it pressures CADCA to remove partner names from its website. Although Pfizer has lobbied against legalization, the company is also investing in the weed industry — and its support for the federal ban may align with its business interests.

In December of 2021, Pfizer announced $6.7 billion acquisition Arena Pharmaceutical Company, based in San Diego. The biotech company, which already operates a drug pipeline focused on cannabis-related therapies, could provide Pfizer with a seamless entry into the legal industry.

Resistance to federal legalization could also be Pfizer’s attempt to keep licenses limited and competition scarce as it commits more resources to Arena and other nearby cannabis projects. Many multistate weed companies continue to lobby against state and federal legalization measures that threaten their current dominance of limited licensing markets.

This is what Big Pharma can lose due to legalization

Faced with the choice of weeds or grains, many patients choose the latter option. (AdobeStock)

The Big Pharma stock study concludes: “The average change in company market capitalization per legalization event is $63 million with a total impact on market capitalization across companies for each event of $9.8 billion… using the historical price-to-sales ratio of drug companies for the year associated with each legalization event, meaning a $3 billion change in annual sales for all drug companies per event.”

With the opioid epidemic in recent years, the fact that patients would have to pay for expensive herbs before taking the free pain pill cannot be ignored.

Consider Chris Goldstein, a NORML advocate who has been tweeting with a serious leg injury. Chris’ tweets explain why major drug companies are concerned about expanding access to medicinal or recreational herbs. “They tried to give me OxyContin for free,” Goldstein Books online in August. “Instead, I pay out of my pocket to treat my pain with cannabis.”

When you put it this way, Big Pharma’s concerns about ending the cannabis ban could become a reality, and Americans who want to see an end to the spread of opioid abuse and Big Pharma’s role in the crisis make a strong case to support legalization in all states. and federal jurisdictions.


*Editor’s note: This article has been updated to include the original study’s note that branded drug producers are more affected by the legalization of cannabis than regular producers.



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