It’s no secret that the cannabis industry has struggled, with the ETFMG Alternative Harvest ETF (MJ) down 30.9% year to date. That’s what makes this earnings season so important. We got some good news when GW Pharmaceuticals (GWPH) reported better than expected results for the third quarter and the stock was rewarded with a 20% gain on Tuesday.

Earnings came in at -0.36 and revenues were $137.10 million for the quarter. Revenues were strong, up 50.7% year over year. It’s worth noting that GWPH has had a tough time over the past few months as its stock price has declined from a high of over $140 down to the high 80’s.

Investors have been concerned about whether or not the company could continue to grow revenues and increase sales of their flagship CBD drug Epidiolex that is used to treat seizures. They got their answer yesterday.

Total revenue for the first nine months of 2020 came in at $378.6 million compared to $202.3 million in the prior-year period, once again representing a substantial increase. The company recorded a net loss of $12.2 million for the quarter, which was an increase from a loss of $13.8 million for the prior year quarter. With losses shrinking, the company is getting closer to profitability. The company also maintained a very strong balance sheet with cash and cash equivalents of $480.3 million as of September 30, 2020.

Justin Gover, CEO of GWPH made the following comments regarding the quarter, “We are pleased to report strong revenue growth in the 3rd quarter despite the challenges presented by COVID-19. Epidiolex meets a serious unmet need within the field of epilepsy and we expect the product to demonstrate continued strong growth in the months and years ahead. The recently expanded indication for the treatment of seizures associated with TSC has been very well received by patients, clinicians, and payers.”

In addition, he stated, “We have also now commenced the pivotal Phase 3 program for nabiximols in the treatment of multiple sclerosis spasticity, which provides multiple opportunities for an NDA submission, including as early as next year. Beyond nabiximols, we are advancing several clinical-stage pipeline candidates, including the recent start of a Phase 2 trial in schizophrenia.”

The company recorded total Q3 net product sales of Epidiolex at $132.6 million. As we can see, the majority of their revenues are coming from epidiolex sales. As the company continues to see substantial sales growth and expansion of its epidiolex lineup, investors have a lot to be excited about.

With epidiolex expanding its treatment for individuals suffering from TSC along with nabiximols entering Phase 3 trials, there still remains substantial room for the company to continue growing revenues. The market clearly was impressed by their results this quarter and I look forward to watching GWPH continue to deliver results.

GWPH shares were trading at $109.57 per share on Thursday morning, down $1.67 (-1.50%). Year-to-date, GWPH has gained 4.79%, versus a 10.73% rise in the benchmark S&P 500 index during the same period.