Image source: GW Pharmaceuticals. In two phase 3 trials each for Lennox-Gastaut syndrome and Dravet syndrome, two rare forms of childhood-onset epilepsy, experimental cannabinoid-based drug Epidiolex easily met its primary endpoint of a statistically significant reduction in seizure frequency. Though a cannabinoid-based drug is no guarantee to be approved by the Food and Drug Administration, it’s certainly on the right path to reaching pharmacy shelves. Epidiolex could easily surpass $1 billion in peak annual sales if approved, possibly allowing the company’s aggressive valuation to make sense. The remaining drug developers, including Corbus Pharmaceuticals and AXIM Biotechnologies, are still years away from potential commercialization of their drug colorado medical marijuana pipelines. Additionally, only two of the aforementioned seven largest marijuana stocks — Canopy Growth Corp. and Aphria — have generated positive EBITDA (earnings before interest, taxes, depreciation, and amortization) over the trailing 12 months. Only Aphria was able to turn a profit ($0.03 per share) among the two, albeit it’s valued at more than 300 times its EBITDA! Long story short, cannabis stocks appear to be grossly overvalued on a fundamental basis.