Arizona: Why this marijuana stock imploded 42% in October

What happened?

Medical marijuana upstart Insys Therapeutics (NASDAQ:INSY) had a ferociously frightening month, highlighted by the arrest of its founder, the setting aside of $150 million for lawsuits, and slumping sales. All this was behind a 42% crash in October, according to S&P Global Market Intelligence.

So what?

Insys Therapeutics' troubles stem from Subsys, a powerful fentanyl spray approved to treat breakthrough pain in cancer patients.

Subsys sales built steadily following its approval in 2012, eclipsing $200 million at its height. However, revelations of kickbacks for off-label prescribing have led to the arrest of key executives including former CEO Michael Babich, investigations by the Department of Justice and state Attorneys General, and a massive decline in Subsys demand has caused investors to shun this marijuana stock this year.

The news didn't get any better for the company last month. On October 26, founder John Kapoor was taken into custody and charged with RICO conspiracy, conspiracy to commit mail and wire fraud, and conspiracy to violate...

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