Since its IPO in May 2013, shares of cannabis drug company GW Pharmaceuticals (NASDAQ: GWPH) have rallied by more than 1,320%. In the span of seven years, a modest investment of $10,000 would have grown to over $142,000 as of July 10. At this rate of growth, investors may be wondering, could GW Pharmaceuticals become a millionaire-maker stock?

As it turns out, not only is the company's underlying business superb, but it's on the brink of flying even higher. Indeed, the company's cannabis drugs are so powerful, they can achieve a clinical response in over 60% of patients who fail standard-of-care treatments for certain indications. Without further ado, let's take a look as to why.

A Major Innovator In Cannabis

GW Pharmaceuticals markets Epidolex (cannabidiol) for the treatment of seizures caused by two rare forms of epilepsy. In the first quarter of 2020, sales of Epidolex nearly tripled compared with last year, reaching $116.1 million. Especially impressive was that the growth was achieved despite the effects of COVID-19, indicating the essential nature of Epidolex for epilepsy patients. There are an estimated 40,000 to 50,000 patients who can be treated by Epidolex in the U.S., but that number approaches 1 million to 2 million globally. That is good news, because Epidolex (Epidyolex) has been approved by the European Medical Agency and is in the early phase of launch.

In clinical studies, patients who took Epidolex reported a 50% reduction in the number of seizures, which is highly efficacious. In addition, the drug's patents do not expire until 2035, giving GW Pharmaceuticals 15 years of market exclusivity. On top of that, Epidolex is also in clinical trials for treating tuberous sclerosis and treatment-resistant epilepsy. With 97% of all insured patients having access to the drug, Epidolex is also very affordable. Hence, it should be no surprise if GW Pharmaceuticals' revenue continues its growth momentum.

Meanwhile, GW Pharmaceuticals is also investigating another cannabis drug, Sativex (part THC, part CBD), for the treatment of spasms in patients with multiple sclerosis. In studies, patients who took Sativex saw a reduction in mean spasm frequency from 11 per day to six per day. The drug has been approved in more than 25 countries outside the U.S. for that indication. GW Pharmaceuticals is seeking Sativex's approval with the U.S. Food and Drug Administration (FDA) pending the success of phase 3 studies. Given that the drug is already approved for this indication in other geographical areas (such as the E.U.), I see no reason why Sativex would fail its U.S. clinical studies.

Why The Stock Is A Great Buy

Currently, GW Pharmaceuticals operates at an annual run rate of over $400 million in revenue and a loss of $530 million to $560 million per year, and it has over $500 million in cash on its balance sheet. Hence, investors should not expect the company to need to dilute its shares in the near-term horizon, and its losses shouldn't be harmful to equity, as it is on the verge of breaking even.

In all, I expect the company's revenue to skyrocket due to the high likelihood of approval of Sativex and various label expansions for Epidolex. With these new ventures, GW Pharmaceuticals can expand its total addressable patient size by more than 33, from about 30,000 to more than 1 million. Therefore, I strongly recommend that avid cannabis investors add GW Pharmaceuticals in their portfolios.

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