GW Pharmaceuticals: High As A Kite And Too Close To The Sun

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Investors in industries deemed popular or in vogue by the general public have a propensity to engage in folly often resulting in the manifestation of valuation bubbles for the pioneering companies. As the great Charles Mackay wrote in 1841: "Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." Nearly 200 years later, these words are still relevant as even nowadays men find it difficult to act against the herd while the herd goes mad.

Infitialis is a research collective that exposes fraud and folly in an effort to identify bubbles before they implode. In this report, we will be exposing folly on the scale of our prior exposés on NASDAQ listed firms such as The Tile Shop and Mellanox and prior fraud report on Medical Marijuana Inc. (OTCPK:MJNA). Purportedly operating in the same sector as MJNA, GW Pharmaceuticals, Inc. (NASDAQ:GWPH) appears massively over-valued and presents a clear and present risk to long investors.

  1. Marijuana Hype Overplayed: GW Pharmaceuticals will derive no benefit from the nascent retail marijuana market opportunity in Colorado, Washington, and other legalizing states.
  2. Corrupted Research: The purported "research literature" regarding marijuana plant-derived cannabidiol (CBD) use in pediatric treatment-resistant epilepsy seems especially dubious because GW Pharmaceuticals has corrupted the objectivity of the authors by being their financial backers; it has failed to disclose this critical fact in SEC filings or investor materials.
  3. Limited Intellectual Property & Pricing Power: Because GW Pharmaceuticals' main products are natural plant-derived extracts, they cannot be patented and there are basically no barriers to other firms extracting and selling the same biologicals. For example, just because orange juice is demonstrated to provide a health benefit doesn't mean that a company can earn outsized returns by selling concentrated Vitamin C.

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Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one. - Charles Mackay, 1841

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