Just like cannabis is finally breaking free of its “tie-dyed stoner” stigma, so are psychedelics, as people begin to recognize that these drugs have been misunderstood for decades. Billions of investment dollars have poured into legal cannabis in recent years and, measured by a growing choir of voices about the potential medicinal value of psychedelics, drugs like psilocybin (magic mushrooms) might be next.
At least, the evidence is pointing that way.
2019 a Watershed Year for Psychedelics
As investors in Europe and North America opened their wallets in support of psychedelic research, esteemed scientists, authors and even celebrities offered the views on the therapeutic possibilities based on their knowledge and experience.
Notably, the John’s Hopkins School of Medicine founded the Center for Psychedelic and Consciousness Research. Underpinned by $17 million in private funding, the center is the first of its kind in the U.S. and largest center in the world devoted to researching psychedelics.
Legislation was introduced in June by Rep. Alexandria Ocasio-Cortez (D-NY) designed to reduce the barriers to study the medical benefits of psychedelic drugs.
European tech investors pooled their cash to amass the largest private financing round ever for a psychedelic medicine-focused biotech, ATAI Life Sciences AG. The German company raised $43 million at a $240 million valuation.
There was no shortfall of media coverage, including features by 60 Minutes, Forbes, Fox Business, NPR, Today and other popular news outlets interviewing experts and reporting on the power of psychedelics for maladies like depression, anxiety, smoking cessation, opioid addiction, PTSD, Alzheimer’s disease, anorexia and other areas where today’s drugs have failed patients miserably.
The FDA approved Johnson & Johnson’s (NYSE: JNJ) ketamine-like nasal spray branded Spravato for use in patients suffering from depression with a high risk of committing suicide.
Denver decriminalized magic mushrooms in May and Oakland followed suit in June.
Getting the point that psychedelics are starting to heat up?
Yield Growth: The First Public Company with a Plan Forward
In the public space, upstart The Yield Growth Corp. (CSE: BOSS)(OTCQB: BOSQF) has been moving in leaps and bounds to establish itself as a leader in the psilocybin research. The company has already made a name for itself in the domestic and international cannabis space and is using some of that experience and network to penetrate emerging mushroom markets, both psychedelic and functional.
In fact, in the words of CEO Penny White, Yield Growth is “the first publicly traded company to announce a legal path to cultivate and research psychedelic mushrooms.”
To move forward, Yield Growth’s subsidiary Flourish Mushroom Labs is partnering with Acres Agricultural Canada Corp. to forge a 50/50 Joint Venture company in the southern Caribbean nation Saint Vincent and the Grenadines (SVG). The JV will be called Acres Flourish Labs (SVG) Ltd., which will be tasked with building a laboratory for the cultivation of psilocybin mushrooms to be used for R&D into compounds and new medicines.
Why Saint Vincent and the Grenadines?
Acres Flourish Labs isn’t being established in SVG because of the paradise-like island environment. Last month, the nation’s Parliament passed a trailblazing piece of legislation called the Plant Breeders’ Protection Bill, 2019, designed to protect intellectual property of breeders of new plant varieties of marijuana.
The JV is hoping that it can get an approval for cultivating psilocybin under controlled conditions and protecting the IP associated with it. This will give the company a clear first mover advantage while having it uniquely positioned in a nation with friendly regulatory oversight and ideal growing conditions.
While it is already generally accepted that psilocybin can have a dramatic impact on many hard-to-treat diseases, companies specializing in breeding will have a competitive edge. This involves manipulating genotypical and phenotypical qualities of the plant to deliver a targeted effect.
In laymen’s terms, the JV will aim to develop the IP to grow psilocybin that is manipulated for efficacy in treating different conditions, albeit addiction, appetite, brain disorders, etc.
Per the deal, Flourish will kick-in the first $200,000 of operating capital as a secured loan bearing 8% interest annually. Additional capital raises will be equally funded by the partners.
Yield Growth is also looking to open a cultivation hub for its cannabis business in SVG. In a separate agreement, Acres will serve as a consultant to BOSS for developing and cultivating proprietary strains of marijuana on the island.
Amber Allen Knows Mushrooms and Wellness
As mentioned, Flourish is diversified, addressing the wellness component of non-psychedelic mushrooms as part of operations. During 2020, it is expected that the company will start generating revenue from this business segment, less than one year after it was founded.
The company has its sights locked on capturing share in a functional mushroom market that Fast Company forecasts to reach $50 billion in the coming years.
To realize this goal, the company this week hired wellness veteran Amber Allen as VP, Sales for Flourish Mushroom Labs Inc.
Ms. Allen brings decades of success in growing brands to Yield Growth, which already is packed with retail veterans coming from famous brands like Johnson & Johnson (NYSE: JNJ), Coca-Cola (NYSE: KO), Pepsi (NYSE: PEP) and Skechers (NYSE: SKX).
Ms. Allen has particularly relevant experience with edible mushrooms and wellness companies, including an instrumental role in growing sales at Four Sigmatic. Amongst other products, Four Sigmatic has a mushroom coffee mix that now outsells household name brand instant coffees Nescafe (OTCQX: NSRGY) and Starbucks (NASDAQ: SBUX) on Amazon.com (NASDAQ: AMZN).
She has also worked at the wellness companies My Matcha Life, Sun Warrior, Mikei Red Reishi and Thursday Plantation.
“Amber’s qualifications in building marketing plans for medicinal mushrooms and experience growing sales for some of the world’s leading mushroom brands make her an ideal candidate to help us launch our mushroom consumer packaged foods division,” said Penny White in a news release on the new hire.
A Renaissance Going Viral
Cannabis remains a Schedule I drug alongside psilocybin at the federal level in the U.S., defining them as drugs of abuse with no real medical value. On its face, that certainly seems wrong. After all, the FDA has approved Epidiolex (cannabis-derived cannabidiol) for treating rare forms of epilepsy. 33 states now allow medical marijuana. ATAI is valued at a quarter of a billion dollars for its pursuit of new psychedelic drugs and a growing library of industry data supports the high valuation based on potential.
We’re in the early stages of a renaissance of scale that we will never see again in our lifetime with the re-shaping of the reputations of cannabis and psilocybin. As Ms. White so eloquently puts it, “investor interest could go viral at any time.”
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