Millions across the globe are struggling with their mental health, and the COVID-19 pandemic is compounding a crisis that has been ignored throughout history.
The U.S. alone spent $89 billion just on mental illness treatment in a single year in 2013, and the roof on those spending figures has disappeared.
When the post-COVID-19 veil is lifted, mental healthcare spending will skyrocket further and the world will emerge in a mental health haze that demands an elixir.
The market for this healthcare segment is again ripe for major innovation, and while medicinal marijuana was the first disruptor, the next one could be bigger.
The innovation will likely come from psychedelics--such as LSD and psilocybin, the active compound in ‘magic mushrooms’--described by the Wall Street Journal as our return to nature that can help alleviate depression, anxiety and addiction.
And one disrupter will potentially be a little known company called Champignon Brands Inc (CN:SHRM;OTC:SHRMF) the innovative startup that aiming to position itself one step ahead of the world’s mental health crisis.
With researchers closing in on the third decade of the "second wave" of psilocybin research, a consensus on the strong clinical potential of psilocybin is building among experts in psychiatry and psychopharmacology.
Mushrooms are having a moment, and the market goes far beyond the shiitakes, portobellos and button mushrooms you find in the produce section of your favorite grocery store.
The psychedelics innovation is setting up to compete with the marijuana boom precisely because of their potential to alleviate a mental health crisis that is a pandemic in its own right.
... and Champignon Brands got to this early, by compiling an impressive IP portfolio in the space.
#1 The Decriminalization Drive in a Struggling World
Nowadays, we are living longer lives than ever before in the history of mankind, thanks to huge medical advancements such as CRISPR gene editing, stem cells, immune reprogramming, electrical brain stimulation, complex organ transplants and smart pills such as PillCams that would once have seemed unthinkable.
Meanwhile, the inexorable march of technology has gifted us with a hodgepodge of devices with an almost impossibly futuristic slant; from quantum computers and humanoid robots to self-driving cars and reusable satellite launchers.
Unfortunately, our fast-changing world has brought some unprecedented medical challenges, chief among them being a rapid increase in mental health issues.
The Journal of Abnormal Psychology has blamed the increased use of smartphones and other digital media for increasing incidences of depression and suicide among adolescents and young adults; a view that is supported by the National Survey of Drug Use and Health (NSDUH).
A CDC surveillance has shown increasing prevalence of mental health issues, with a documented rise in adolescent and young adult (13-25) suicide rates from 8.9 to 11.6 per 100,000, a 30% increase since the turn of the 21st century.
According to the World Health Organization (WHO), 25% of the world’s population will be afflicted by mental health and/or neurological disorders at some point throughout their lives.
The sad truth is that the mental health arena has been frequently neglected over the last 30 years.
It’s little wonder then that the formerly much-maligned ‘magical mushroom’ and psychedelic-inspired medical industry is looking to make a huge comeback.
With growing resistance to current antidepressant medications, more and more people are shunning conventional treatments, which they have to take for the rest of their lives, for radical new therapies of the future such as psilocybin.
These novel and natural treatment protocols have shown in initial research that they are not only effective at treating mental disorders such as depression and Post-Traumatic Stress Disorder (PTSD) but also increase the sense of well-being often in just a few sessions.
Clinical research has not merely helped to sprout an understanding of psilocybin’s potentially vast treatment benefits, but has also multiplied our conviction that transformative medicine like Psilocybin is the future of mental healthcare.
Like the marijuana legalization drive, the psilocybin decriminalization drive is moving full steam ahead.
In 2018, researchers at John Hopkins University released a study analyzing the Psilocybin’s abuse potential, concluding that it should be rescheduled to Schedule IV, where most prescription benzodiazepines can be found.
Psilocybin is currently a Schedule I narcotic, meaning the DEA considers it a drug with high abuse potential and no healing characteristics--the same category as heroin. But this classification is largely farcical, because Psilocybin is neither considered to be addictive nor does it cause compulsive use.
When researchers resumed psychedelics research in the 1990s after a 30-year layoff, they focused on Psilocybin instead of other psychedelics mainly because of its short duration effect--2-4 hours versus the 12 average hours of an LSD trip--and the fact that it hadn’t been stigmatized as much as many other compounds that had their heyday in 1960s counterculture.
You can think of Psilocybin as the THC equivalent of Mushrooms--but with even bigger potential to treat mental disorders such as depression, PTSD and even help in addiction cessation.
Already, a growing number of jurisdictions have started to actively decriminalize Psilocybin and Psilocybin mushrooms.
In May, Denver voted to make possession of mushrooms a low law enforcement priority and forbid the city from spending public resources on possession charges, becoming the first city in the U.S. to decriminalize magic mushrooms.
Other jurisdictions soon followed suit.
One month later, Oakland voted to end criminal penalties for the use and possession of psychoactive plants and fungi on the basis that the substances have valuable traditional and religious uses.
Chicago could soon be on track to become the next municipality to decriminalize psilocybin use.
Oregon could become the first state to end mushroom criminalization if the psi-2020 ballot passes.
In June, U.S. Rep. Alexandria Ocasio-Cortez, a New York Democrat, introduced a House amendment that would have made it easier for research institutions to study the compound; the measure was rejected in a House vote.
With Psilocybin decriminalization gathering momentum, it may not be long before the compound enters the mainstream mental health and wellness market, exactly as we have seen with medical marijuana.
#2 Early Mover Advantage + Huge Growth Runways
But just as we witnessed with marijuana, not all players are going to succeed in the bubbling psychedelic market.
Players like Canopy Growth and Aurora Cannabis leveraged their first-mover advantage to dominate the marijuana industry.
Companies such as Champignon Brands Inc. enjoy first-mover advantage in the medical Psilocybin space, are hoping to dominate the alternative medicine renaissance for years to come.
Champignon Brands Inc.’s (CN:SHRM;OTC:SHRMF) ethos is fully grounded in the mushroom industry, including a very strong executive team and a goal to become the most vertically integrated psychedelic mental healing optimization company.
It owns an ecosystem from research and cultivation to formulations of cutting-edge premium products.
But what’s particularly impressive about this $35M company (market cap) is the Total Addressable Market (TAM) that it has in its cross-hairs.
Psilocybin (Magic Mushrooms), Ibogaine, Ketamine, 5-Me0-DMT, DMT, LSD (Acid), MDMA (Ecstasy) and Mescaline are Schedule 1 Drugs (Psychedelics) that are shown in research to be effective in the treatment of a wide array of mental health conditions including Drug Addiction, Alcoholism, Depression,Migraines, PTSD and Smoking Cessation.
But Psilocybin beats them hands down in efficacy and speed of action.
Many Big Pharma antidepressants just aren’t working anymore, not to mention they come with a boatload of terrible side effects and only work for some patients.
Psilocybin is not only a rapid onset compound and less addictive than many conventional antidepressants, but it is also thought to be highly effective against depression, addiction and Post-Traumatic Stress Disorder (PTSD). It’s also proven highly effective at increasing the sense of well-being--often in just a few sessions.
This gives Psilocybin a great shot at the global antidepressant market valued at $14.3B…
It will also be marketed on decriminalization to the PTSD Therapeutics market that’s expected to hit nearly $11B in six years…
The global functional mushroom market Champignon is looking to penetrate is expected to reach $34.3 billion by 2024, registering a CAGR of 8.04% during the forecasted period (2019 - 2024).
But most importantly...
It will have the massive $4.5 trillion Global Wellness Industry at its feet.
Source: Global Wellness Institute
These are incredible growth runways that Champignon Brands Inc. (CN:SHRM;OTC:SHRMF) will try to readily exploit for years and decades to come. Runways that will put even Gwyneth Paltrow’s Goop to shame.
Another big advantage: Unlike most biotech companies which are unable to survive if their first bunch of clinical trials fail to come through, Champignon has hedged its bets by acquiring a raft of clinical infrastructure. Champignon’s clinic is the only vertically integrated rapid onset treatment centre operating from proof-of-concept to human clinical trials and publication, with study results in peer-reviewed journals by the world's leading experts in psychopharmacology. Champignon’s clinical infrastructure also serves as a rapid onset treatment training and education center for medical professionals and is equipped with a co-located pharmacy.
The clinic has been licensed by Health Canada to dose eligible patients with psilocybin and is the only clinic in Canada to perform psilocybin doses under Health Canada approval.
These clinics have cash flows and are already profitable which improves revenue visibility. It also means that the company may not have to constantly rush to the secondary markets looking to sell more shares in a bid to raise funds for operations and R&D.
#3 100% Intellectual Property (IP) Ownership
Patents are the lifeblood of the biotech industry.
Biotech companies are responsible for some of the most innovative developments in the world, the majority of which are protected by patents.
Biotechnology is one of the most research-intensive industries, with companies in the sector typically investing between 40% and 50% of their revenues in research and development, compared to 13% in pharmaceuticals and 5% in the chemical industry.
In many cases, IP rights can actually be the final product.
Not every biotechnology company sees a product through from design to manufacture. Many small biotechnology firms license their patented innovations to larger firms with the resources capable of producing them and taking them to market.
The success of these small companies depends on whether those companies can convince investors that their firms have a sound intellectual property strategy. This strategy, which centers on patents, helps minimize the risks for investors.
That’s why Champignon Brands’ (CSE:SHRM) already impressive cache of pharmaceutical patents gives it a leg up in the competitive rush to claim market share in the nascent Psilocybin industry.
The company has acquired a good chunk of its IP property through a series of smart acquisitions of entrenched players ranging from research facilities and specialty biotech companies to craft mushroom cultivation facilities.
But some will come from its in-house clinical research, too.
Normally, when you do clinical trials, the ideal is to own the resulting IP. Champignon is partnering with the University of Miami and Miller School of Medicine in its research work but will own 100% of the intellectual property, drug discovery, and resultant data.
Its Psilocybin Patent Portfolio will greatly help the company in the commercialization of GMO and vegan certified rapid onset treatments capable of improving health outcomes, such as depression and post-traumatic stress disorder (PTSD), as well as substance and alcohol use disorders.
Even better: It can license its patented formulations to other companies as it deems fit.
#4 Smart Acquisitions
Tassili, a 100% owned subsidiary, is focused on development of therapeutics for multiple pathological psychological diseases based on psychedelic and cannabis compounds. In
partnership with a multidisciplinary team of scientists and physicians at the University of Miami, Tassili is working to develop effective psilocybin-based therapeutics for the treatment of mild traumatic brain injuries (mTBI) and/or posttraumatic stress disorder (PTSD).
Presently, Tassili is conducting preclinical studies and eventual human clinical trials, with the objective of demonstrating the safety and efficacy of the combination of psilocybin and cannabidiol in treating mTBI with PTSD or stand-alone PTSD; final results are expected in 2021.
Tassili has filed four provisional patents and in collaboration with university research institutes intends to demonstrate that the clinical and physiological effectiveness in PTSD and obsessive-compulsive disorder (OCD) are enhanced by timely measured dosages of psilocybin and cannabidiol, with superior clinical results measured by objective outcomes.
Artisan Growers is another subsidiary 100% owned by Champignon Brands Inc.’s. The company operates a craft mushroom cultivation facility, capable of producing an assortment of organic craft mushroom varieties, including Lion's Mane, Chaga, Reishi and Agaricus Blazei. Artisan Growers utilizes a variety of cultivation techniques and grow infrastructure to produce premium craft mushrooms.
Champignon also wholly owns Novoformulations, a specialty biotechnology company focused on developing novel and innovative delivery systems for the pharmaceutical and nutraceutical industries.
Novoformulations is presently working with ketamine, anesthetics and adaptogenics, as well as a host of pharmaceuticals and natural molecules at a purpose-built good manufacturing practice (GMP) and pharmaceutical (DIN) licensed facility, located in Quebec, Canada, and an accredited pharmacy in Ontario.
#5 Super Tag Team
The ultimate objective of any investment is to grow your capital and maximize your profits...
And few industries are as promising as the bustling psychedelic biotech sector, assuming the compounds are widely decriminalized.
Psilocybin and Magic Mushrooms could be the new marijuana… Champignon is looking to follow in the footsteps of Canopy Growth Corp.
Source: CNN Money
In other words, early-in investors have already more than quadrupled the value of their stock in the company less than two months after it went public.
Champignon is adequately capitalized, raising over $4 million since inception. The company also fully owns Canadian Rapid Treatment Center of Excellence, a clinic that is doing 1.5 million in annual revenue and gross margins of up to 50%.
Champignon plans to roll out five more such clinics before the current year.
Mind Medicine has a $113M market cap likely due to its ties to "Shark Tank" investor Kevin O'Leary and Canopy Growth Corp CEO Bruce Linton, despite MindMed only having IPO’d in February.
Yet, Champignon is headed by a super-tag team that’s every bit as impressive.
Sitting on the company’s board are a securities lawyer; a cannabis accountant and two ex-Toronto narcotics officers who are well versed in decriminalization. They are 100% committed to being a first mover in the space and have the personnel to make it happen.
At a current valuation of just $65M, straddling incredible growth runways and an idea whose time has finally come, this is a company to watch.
Other companies capitalizing on the decriminalization trend:
Curaleaf Holdings NASDAQOTH:CURLF) (TSX:CURA)
Curaleaf is a multi-faceted U.S. cannabis company, operating dispensaries, cultivating product, marketing and more. The company also produces a wide range of cannabis products, including concentrates, edibles, tinctures, capsules, vaporizer cartridges, and dry natural marijuana.
Despite the fact that the company only just went public, it has seen a lot of attention from investors, securing a valuation of over $4.5 billion.
Curaleaf’s third-quarter financials shocked analysts, with Q3 revenue soaring by 289 percent. "Boasting the largest retail dispensary footprint under a single, unified brand, with now 33 locations across 10 states, Curaleaf has established itself as a leader in the burgeoning U.S. cannabis industry,” CEO Joe Lusardi noted.
Molson Coors (NYSE:TAP) (TSX:TPX-A)
Molson Coors is an iconic multi-national beer company, with brands that are recognizable across the United States and Canada. Besides just its Molson and Coors lines, the company has also ventured into more niche beverages to take advantage of the growing craft beer market, buying up brands like Leinenkugel’s and Blue Moon.
Not to be left behind in the marijuana boom, Molson Coors is also developing a line of non-alcoholic cannabis-based beverages with its partner, the Hydropothecary Corporation.
Molson Coors Canada president and CEO Frederic Landtmeters noted, “While we remain a beer business at our core, we are excited to create a separate new venture with a trusted partner that will be a market leader in offering Canadian consumers new experiences with quality, reliable and consistent non-alcoholic, cannabis-infused beverages.”
Aurora Cannabis (NYSE:ACB) (TSX:ACB)
Aurora Cannabis is one of the biggest names in the burgeoning marijuana sector. With a market cap over $14 billion, Aurora has carved out its position as a leader in the industry. And the company is still making moves.
Recently, Aurora sealed a supply deal with Mexico’s Farmacias Magistrales SA, the country’s first and, for now, at least, only federally licensed importer of raw materials containing THC.
In an announcement from Aurora, the company stated that the deal “firmly establishes Aurora’s first-mover advantage in one of the world’s most populous countries, where more than 130 million people will have federally legal access to a range of Aurora’s non-flower medical cannabis products containing THC.”
Cronos Group (NASDAQ:CRON) (TSX:CRON)
Following its October slump, Cronos Group has seen a surge in trading volume, with a renewed investor interest in the company thanks to rumors surrounding the company’s discussions with tobacco giant Altria.
The Canadian firm, though primarily an equity investor, has made some major moves in recent years, wheeling and dealing with some of the hottest names in the sector. Because of its forward-thinking attitude, it has drawn the attention of many major mainstream players, including the company behind Marlboro, Altria Group.
On December 7th, rumors were finally confirmed when Cronos made the official announcement of a C$2.4 billion strategic investment from Altria. "Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth," said Cronos Group's Mike Gorenstein, Chairman, President and Chief Executive Officer.
Canopy Growth Corporation (NYSE:CGC) (TSX:WEED)
After securing a major $4 billion investment from beverage giant Constellation Brands, it seemed like Canopy Growth was on the top of the world. The same day, shares in the company surged by 30 percent.
Though things have cooled down a bit since then after a downgrade from analysts of the Constellation Brands stock, Canopy has not stopped making moves in the market, most recently swallowing up renowned vaporizer producer Stor & Bickel Gmbh & Co., the creator of the iconic Volcano® Medic and the Mighty® Medic devices
The €145 million all-cash deal makes it one of the largest in the marijuana sector this year, and Canopy Growth is not likely to stop there.
By. Lloyd Davis
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
FORWARD-LOOKING STATEMENT. Statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense. Forward looking statements in this article include: that governments will legalize and regulate psychedelic medicine; that the worldwide functional mushroom markets combined will be worth $34.3 billion in gross sales in 2024; that Champignon Brands Inc. (“Champignon”) can raise funds and acquire the firms listed that are involved in the mushroom and the Psychedelic medicine industries and access the expertise of Champignon’s acquisition targets’ management teams to create and market depression and anxiety treatments; that, if psychedelic medicine markets open up in other industrialized countries, the global psychedelic medicine market could expand exponentially; and that Champignon’s business will be profitable. Forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Forward looking statements involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Matters that may affect the outcome of these forward looking statements include: that Psychedelic medicine may not be legalized on the timeline as expected or at all; that markets may not materialize as expected; that psychedelic medicine may not turn out to have as large a market as thought or be as lucrative as thought as a result of competition or other factors; that Champignon may not be able to close on its announced acquisitions or expansion plans because of regulatory approval requirements or other reasons; that the acquisitions do not provide the expected benefits, business or expertise expected; that Champignon may not be as able to diversify or scale up as thought because of potential lack of capital, lack of facilities, regulatory compliance requirements or lack of suitable employees, partners or suppliers; none of Champignon’s treatments have passed clinical trials or received FDA or other health authorities’ approval; that Champignon may not be able to raise funds and develop better treatments than competitors in the psychedelic medicine industry; that foreign governments may not allow Champignon to operate in their countries; that actual operating performance of the facilities Champignon do not meet expectations; that competition quickly develops; that Champignon may not be able to retain key employees, partners and suppliers; costs may be higher than expected and profits therefore lower; competitors may capture most or all of the increased market demand; and other risks affecting the Company in particular and the psychedelic medicine industry generally, including without limitation risks related to most agricultural crops, including crop failure and medical developments, including without limitation failure of human trials or rejection by medical regulators. The forward-looking statements in this document are made as of the date hereof and the Company disclaims any intent or obligation to update such forward-looking statements except as required by applicable securities laws.
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