Jazz Pharmaceuticals (JAZZ Quick QuoteJAZZ - Free Report) offers investors an unconventional way to gain exposure to the medical cannabis space. It operates as an established biopharmaceutical company with a portfolio of prescription medicines, including a cannabinoid-based treatment for rare forms of epilepsy.

The distinction sets the company apart from traditional players like Green Thumb Industries (GTBIF Quick QuoteGTBIF - Free Report) and Curaleaf Holdings (CURLF Quick QuoteCURLF - Free Report) , which focus on recreational and broader medical marijuana markets. With its diversified commercial portfolio and continued investment in growth opportunities, Jazz offers a risk-reward profile that differs from those of most cannabis stocks.

However, the company's broader business performance, pipeline uncertainties and stock valuation remain important considerations for investors. Let's examine its latest progress and growth prospects to determine whether JAZZ remains a compelling way to play medical cannabis.

Epidiolex Sales Highlight Jazz's Medical Cannabis Opportunity

The acquisition of GW Pharmaceuticals in 2021 marked Jazz’s entry into the cannabidiol (CBD) space, adding Epidiolex to its portfolio. The drug is approved as an oral solution for treating seizures associated with three rare and severe forms of epilepsy — Lennox-Gastaut syndrome (LGS), Dravet syndrome and tuberous sclerosis complex — in patients aged one year and older.

Epidiolex continues to expand Jazz's neuroscience business beyond its oxybate franchise. In the first half of 2026, the drug's net product sales rose 15% year over year to $542 million. Management cited strong demand across pediatric and adult patient populations and highlighted further growth opportunities in long-term-care settings. To further strengthen the franchise's long-term durability, Jazz has settled nearly all patent disputes related to Epidiolex, effectively extending protection into the very late 2030s, subject to specified earlier-entry conditions.

Jazz is also pursuing opportunities to broaden the franchise through new formulations and clinical development. The company has submitted an FDA application for a CBD capsule formulation intended to provide greater flexibility for patients using the drug for its currently approved indications.

Meanwhile, Jazz is also expanding its clinical program to investigate Epidiolex in additional seizure disorders and patient populations. The company has outlined a phase III study in developmental and epileptic encephalopathy, a phase II/III study in juvenile myoclonic epilepsy and a phase IIIb/IV study in adults with LGS. Although any expansion into additional indications will depend on clinical outcomes and regulatory decisions, these programs offer potential avenues for future growth.

Sleep and Oncology Franchises Broaden JAZZ’s Growth Base

While Epidiolex remains JAZZ's key asset in the medical cannabis space, the company also benefits from established neuroscience and oncology franchises. This breadth of commercial assets reduces Jazz's reliance on any single product and provides greater earnings stability.

In neuroscience, Xywav continues to drive growth in the sleep disorder business. Net sales of the drug rose approximately 16% year over year to more than $879 million in the first half of 2026, supported by strong demand and continued patient additions. Its low-sodium formulation remains a key differentiator, although investors will need to monitor the impact of generic competition on the broader oxybate franchise.

Jazz's oncology business is also expanding. Overall revenues increased 38% year over year to roughly $696 million, driven by strong uptake of Zepzelca in the first-line maintenance setting, the continued rollout of Modeyso and growing sales of Ziihera. These products provide an additional growth driver beyond the company’s neuroscience portfolio.

Pipeline Execution Risk Remains

While Jazz has successfully expanded its commercial portfolio, pipeline execution remains a critical risk. The company's development programs have delivered mixed outcomes, highlighting the challenge of consistently translating clinical assets into durable growth drivers.

In June 2026, Jazz announced that a late-stage study evaluating Zepzelca in second-line metastatic small cell lung cancer (SCLC) failed to meet its primary endpoint. The setback was particularly significant because the study was intended to fulfill post-marketing confirmatory requirements supporting the drug's accelerated approval in the second-line setting.

Following the disappointing results, Jazz sought voluntary withdrawal of the drug's second-line indication, which became effective on Sept. 30, 2026. Although management stated that the outcome would not affect Zepzelca's first-line maintenance approval or its 2026 financial guidance, the setback highlights the clinical and regulatory risks associated with the company's pipeline.

JAZZ also suffered setbacks in the neuroscience space. In the past few years, Jazz has discontinued the development of suvecaltamide (for essential tremor and Parkinson's disease tremor) and JZP150 (for PTSD), after mid-stage studies failed to meet their primary endpoints.

JAZZ’s Share Price Performance & Estimates

Shares of Jazz have risen 26% year to date compared with the industry’s 2% growth, as shown in the chart below.

Image Source: Zacks Investment Research

Earnings estimate trends, however, paint a mixed picture. The EPS estimates for 2026 have declined over the past 30 days from $25.34 to $23.51.This downward revision can be attributed to the upfront payment of $820 million made by Jazz for completing the acquisition of Actio Biosciences last month.

Image Source: Zacks Investment Research

How to Play the Stock?

Jazz Pharmaceuticals offers investors a differentiated way to gain exposure to medical cannabis, while its diversified portfolio provides additional growth opportunities. However, investors should remain wary of pipeline setbacks, which could weigh on the company's long-term growth prospects. The recently completed Actio Biosciences acquisition and related accounting effects may weigh on near-term earnings, although the deal expands Jazz’s epilepsy pipeline.

With a Zacks Rank #3 (Hold), Jazz may appeal to investors seeking stability with selective cannabis-linked upside, rather than a high-risk, policy-driven bet. Unlike traditional cannabis players, Jazz's cannabinoid business is driven by an FDA-approved prescription medicine rather than adult-use legalization or demand for recreational marijuana.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.