A cheek spray that relieves pain being studied in Sydney could be a wonder drug worth billions, at least according to one executive in Australia’s booming medical marijuana industry.

The country’s entrepreneurs have joined the global cannabidiol oil craze in a big way, researching its use in treating everything from anxiety and skin rashes, to pain and inflammation in dogs.

There’s been enormous interest in cannabidiol oil, or CBD, ever since it was credited with dramatically reducing the epileptic seizures of a young American girl in 2013 after other medicines failed.

“There’s just an explosion of interest in studying the individual chemicals to see what they do,” says Matt Callahan, executive director of ASX-listed Botanix Pharmaceuticals.

“I think it’s going to be really significant. It’s the only time in my career we’ve had a drug that cures a lot of diseases and it doesn’t seem to cause side effects.”

Botanix is holding clinical trials on a CBD gel to treat acne and dermatitis, and Mr Callahan says early results are promising.

Medlab Clinical meanwhile is investigating using a mix of CBD and THC – the compound that gives cannabis users their high – via a cheek spray to treat pain in cancer patients.

“We’ve got clinical trials going on at Sydney Royal North Shore Hospital that are progressing nicely; the data from them is sensational,” says chief executive Sean Hall.

“We’re looking down the face of a potentially another Lipitor.”

That’s a bold claim, given that the cholesterol-lowering drug made Pfizer as much as $A18 billion a year during the 2000s.

“It’s always the way of medicine, you get something new and shiny and it gets overhyped,” says Professor Iain McGregor, director of the Lambert Initiative for Cannabinoid Therapeutics at the University of Sydney.

Still, Prof McGregor says there’s no smoke without fire and there’s evidence that CBD could be used to treat a range of conditions.

“We do have signals, in alcohol dependency, in anxiety, in acne, in inflammation, in neuropathic pain. It’s very tempting to pin your hopes on a molecule like this.”

Mark Bernberg, who runs cannabis investment portfolio Green Fund, says he’s heard the comparisons to the cryptocurrency craze of 18 months ago but says they couldn’t be further from the truth.

“This is real jobs, real products, real opportunities. This is having a real and meaningful impact on people’s lives,” he says.

“Our thesis at the Green Fund is that this is the greatest disruptor since penicillin.”

But Layton Mills, managing director of Sydney’s CannPal Animal Therapeutics, which is investigating using CBD and THC to treat pain and inflammation in dogs, warns scams are as real as the promise.

“Every week I might see 10 to 15 products come to market, and maybe less than five per cent have some independent efficacy research, basic safety research, or even very basic independent quality controls and processes,” he said.

“That’s a little frightening.”

Prof McGregor says Australia’s relatively small medical marijuana companies will also face challenges when the world’s multinational pharmaceutical companies turn their attention to CBD.

“Most of them will be dead in two years. It’s a speculators’ dream right now” with ideas that range from the “sublime to the ridiculous,” he says.

“You really have to have your business plans right.”