Functional Fungi: Chasing the Technicolor Gold Rush

With many cannabis stocks so far failing to live up to the hype for the sector, investors looking for similar opportunities in emerging markets have begun to take notice of psychedelics. And there are some big names in the game. Last month, billionaire and PayPal co-founder Peter Thiel and other notable investors led a $24 million round of funding to back ATAI Life Sciences and its bid to explore psychedelics as potential treatments for mental health conditions including depression.

Another player in the emerging psychedelics-as-pharmaceuticals market is MindMed, which counts former Canopy Growth CEO Bruce Linton and Shark Tank celebrity investor Kevin O’Leary among its backers. In March, MindMed became one of the first psychedelic companies to go public with an IPO listed on the Canadian NEO Exchange. Only days before, Champignon Brands, a firm developing mental health treatments with psilocybin and ketamine, made its debut with an IPO listing on the Canadian Stock Exchange under the ticker symbol SHRM.

With this new attention focused on the therapeutic potential of psychedelics, another Canadian company is positioning itself to be ready to offer consumer products manufactured from the psychotropic fungus. Dubbed Psyched Wellness, the firm is preparing to file a listing statement with regulators this week and hopes to be trading on the Canadian Securities Exchange by this summer, according to CEO Jeff Stevens.

Although the company’s long-range plans include exploring the possibilities of products manufactured from psilocybin mushrooms as the legal status of the fungus continues to evolve, its initial efforts are focusing on mushrooms that are classified as foods instead of as drugs. Psyched Wellness has already begun research and development of a tincture made from Amanita muscaria, the familiar red-capped mushroom with white spots commonly associated with Alice in Wonderland. In very low doses, Stevens says, Amanita promotes relaxation and can be used as a sleep aid. But it can also be toxic, so trusted products are difficult to locate. Psyched Wellness is developing its tincture so that the toxic compounds are removed, leaving the desirable muscimol.

Building A Brand

To develop the new product and bring it to consumers, Psyched Wellness is assembling a team with experience in branding and marketing consumer packaged goods and a track record for creating companies in emerging, highly regulated industries.

“We were able to attract Terry Booth, the founder of Aurora cannabis,” Stevens told High Times in a phone interview. “He joined the board and that certainly was a catalyst as far as getting a lot of eyeballs to the company and a lot of attention to what we’re building here.”

The board of directors of Psyched Wellness also includes chairman Michael Nederhoff, the president of Juul Labs Canada and Nick Kadysh, Juul Canada’s head of corporate affairs and former director of public affairs for Red Bull Canada. Product development and R&D are being led by COO David Shisel, who has worked in the medical cannabis industry in Europe and Israel since 2017.

“We believe that these are the best in class for this opportunity and the idea of building a team to build a brand and then be positioned to take advantage of the psychedelic sector as various psychedelics become legal in various jurisdictions,” Stevens said confidently.

Research that supports potential therapeutic applications for psilocybin, which include treatments for depression, anxiety, addiction, and PTSD, are contributing to a growing acceptance of magic mushrooms as medicine.

“We’re starting to see that mainstream media talk about the benefits of certain psychedelics over opioid use and we feel that all of those things will move forward similar to what happened in cannabis with destigmatizing this and turning people’s mindset,” he said.

Those changing attitudes, coupled with calls to legalize psychedelics for medicinal uses, could eventually evolve into a new class of products that follows the trail blazed by legal marijuana.

“We all believe that we have very similar opportunities in psychedelics as those that existed with cannabis 8 to 10 years ago,” said Stevens.

With an established brand and corporate infrastructure developed to take advantage of the functional mushroom market, which is expected to be worth more than $34 billion by 2024 according to data from Modor Intelligence, Stevens said that his company will be prepared to pivot into psychedelics when the time is right.

“With the guided therapies and the clinical trials that are happening on the science side, I think they’re really going to open doors for companies like Psyched Wellness for the next two to three years and we’ll be positioned with a platform, a team, and a brand where we can then really take advantage of that as it opens up,” he said.