NEW YORK (MainStreet) — On Monday GW Pharmaceuticals (GWPH), a medical marijuana company publicly traded on the Nasdaq, touted the extended breadth of its cannabinoid drugs: beyond treating pediatric epilepsy and cancer pain, GWPH says it has the capabilities to treat Type 2 diabetes and schizophrenia. This would position GWPH as a fantastic pharma stock play, but are these claims legit?

The company demonstrated great potential with Sativex to treat oncological pain and its revolutionary treatment of epilepsy with Epidiolex, which has been through a Phase 1 clinical trial that showed the non-psychoactive cannabinoid cannabidivarin (CBDV) effectively treats seizures.

"As GW continues to progress its clinical work with cannabinoids, our pipeline has the potential to yield, as it did with Epidiolex, a flow of exciting new product candidates in a wide variety of therapeutic areas," said Dr. Stephen Wright, GW's Director of Research and Development.

The psycho-muscular control of seizures through cannabinoids may be intuitive to understand. But claims of treating psychosis through a drug generally thought of as a simple narcotic may be more difficult to fathom.

Still, GW has started Phase 2a trial using to treat schizophrenia featuring purified CBD as its active ingredient. Isn't that just pouring gasoline on a fire?

Fear not, said Robin Murray, professor of psychiatric research at the Institute of Psychiatry, Kings College London.

"CBD [cannabidiol] is a constituent of traditional cannabis and tends to counteract the effects of THC [terahydrocannabinol], the psychotogenic component," said Murray. "We have shown that it ameliorates the effect of THC in experimental studies."

Murray has himself studied the long-term effects of cannabis use on inducing psychosis and edited Marijuana and Madness (Cambridge University Press, 2011)

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But, of course, he says there needs to be a distinction made between something like skunk, which refers to certain sativa-dominant cannabis hybrids, and hash, which has substantial CBD.

"One of the reasons that skunk has a greater risk in increasing risk of psychosis than hash is that there is no CBD in skunk," Murray said.

CBD, by contrast, has been shown to be an antipsychotic in human beings.

GW's study is expected to enroll approximately 80 patients with an estimated completion date in the second half of 2015. The drug in the trial, known as GWP42003, has demonstrated anti-psychotic effects in accepted pre-clinical models of schizophrenia and the ability to reduce the characteristic movement disorders induced by currently available anti-psychotic agents.

Marijuana as Panacea

To boot, GW says it has started a 12-week randomized study of an orally administered product featuring plant-derived terahydrocannabivarin (THCV) to treat Type 2 diabetes. It is thought that there will be an effect on glycaemic control with an exploratory study demonstrating anti-diabetic effects from the substance including reduced fasting plasma glucose levels, an increase in fasting insulin, improved pancreatic beta-cell function and increased serum adiponectin.

Down the road, GW has a Phase 2 clonal development for ulcerative colitis with data expected midway through 2014 and a Phase 1b/2a clinical development trial for glioblastoma multiform.

--Written by Ross Kenneth Urken for MainStreet