Is This the Best Marijuana Stock to Buy Right Now?

There certainly are a few reasons to be pessimistic about Insys Therapeutics (NASDAQ:INSY).

Its cannabidiol drug, Syndros, still hasn't been scheduled by the U.S. Drug Enforcement Agency (DEA). The company recently announced a delay in the release of its fourth-quarter and full 2016 results. And Insys Therapeutics stock has dropped more than 30% over the last few weeks.

Despite all of that, could Insys actually be the best marijuana stock to buy right now? I think so. Here's why.

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This Too Shall Pass

The issues that are currently hurting Insys Therapeutics stock are only temporary. Although the DEA still hasn't scheduled Syndros under the Controlled Substances Act nearly nine months after the drug won approval from the Food and Drug Administration (FDA), that slow pace isn't unusual. It sometimes takes the DEA more than a year to schedule a product.

And, while it's never a good thing when a company has to delay reporting its results, Insys is unlikely to make the market wait much longer. The board of directors' audit committee said it found some issues in an internal review, and those caused the company to submit a notification of late filing with the Securities and Exchange Commission. This submission gave Insys an automatic 15-day extension on filing its 10-K for 2016. The company said it doesn't anticipate needing additional time beyond that.

What about the impact of the internal review? The audit committee is looking at the company'sprocesses "related to estimation of, and increases to, certain sales allowances recorded during 2016" plus "extended payment terms offered to certain customers during the third quarter of 2016." Insys stated that its figures for 2015 net revenue and pre-tax income could be reduced by no more than $5 million. Assuming that's the extent of the impact, this issue should blow over quickly.

Not a Happy Time for Marijuana Stocks

Many marijuana stocks are languishing due to uncertainty about what actions the Trump administration plans to take to enforce federal laws against the sale and use of marijuana. For example, shares for Medical Marijuana Inc. (NASDAQOTH:MJNA), one of the largest U.S. marijuana distributors, have fallen more than 20% year-to-date.

Medical Marijuana Inc. and other marijuana stocks could be headed for a long roller coaster ride. Every comment made by the White House and every tweet from President Trump about marijuana holds the potential to cause shares to rise or fall. This could go on for another four years -- and potentially longer.

However, this uncertainty doesn't affect developers of cannabinoid drugs like Insys and GW Pharmaceuticals (NASDAQ:GWPH). Those companies are on the right side of federal laws and regulations. Admittedly, GW Pharmaceuticals does face some unknowns: It must still gain FDA approval for Epidiolex, itsl cannabidiol drug . However, Epidiolex's chances appear to be pretty good based on late-stage study results.

Best Marijuana Stock?

I have argued in the past that GW Pharmaceuticals was the best marijuana stock on the market -- and I still think it should do very well. However, for now, at least, I suspect that Insys has taken over the top spot.

Syndros could generate annual sales of more than $200 million. Dronabinol is already frequently prescribed as a treatment for anorexia in patients with AIDS, and for nausea and vomiting associated with chemotherapy. As the first oral form of dronabinol,Syndros' ease of use should allow Insys to grab a significant chunk of the market.

Three things need to happen in order for Insys Therapeutics stock to soar. First, the company needs to report its fourth-quarter and full 2016 results soon. That should occur. Second, Insys needs to reassure investors that its internal review didn't uncover more serious issues. I think the company will likely put those fears to rest in its discussion of the fourth-quarter results. Third, the DEA needs to complete its scheduling of Syndros. That might take a few more months, but investors can anticipate this item will also be checked off relatively soon.

I see no reason why Insys' share price can't regain its levels from a few weeks ago, and go even higher. The recent pullback presents a solid buying opportunity. Insys Therapeutics looks like the best marijuana stock to buy right now.

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Keith Speights has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.