In the few places where cannabis is legal, it can be incredibly lucrative. Last year, the nascent worldwide marijuana sector pumped out approximately $15 billion in sales. By 2024, that number is expected to triple. Not bad for an industry that, less than a decade ago, was entirely illegal almost everywhere on Earth and is still outlawed in most countries.
Investors are seeing big opportunity in psychedelics, too. The enormous potential of medicines like ketamine, psilocybin and MDMA to treat mental health has some whispering that psychedelics are the next billion-dollar industry. They probably aren’t wrong: in 2019, Americans spent $225 billion on mental health services, according to the German statistics database Statista. Treating anxiety or depression can equal bank for some.
Now startups dedicated to psychedelic medicine are going public, intending to list on Canadian stock exchanges. Among them is Mind Medicine Inc. (“Mindmed”), a Canadian company that made headlines this week when its co-founder and director Jamon R. Rahn, announced intent to list on NEO Exchange based in Toronto by the first week of March 2020—targeting a valuation worth $50 million, according to Bloomberg News.
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“Our ambition is to be one of the first publicly listed neuro-pharmaceutical companies developing psychedelic medicines,” Rahn, told Bloomberg. (DoubleBlind reached out to Mindmed for comment and we’ll update this post if we hear back.)
Last June, Mindmed acquired a synthetic drug called 18-MC (18-methoxycoronaridine), an analog of ibogaine, which can allegedly help eradicate addiction. The company is currently prepping for an FDA-approved Phase 2 clinical trial for 18-MC. Mindmed’s director is Bruce Linton, the former co-CEO of Canopy Growth Corporation, the world’s largest cannabis company. The startup has also attracted Shark Tank star Kevin O’Leary as an investor.
“I invested in MindMed because they are approaching psychedelics through rigorous science and FDA trials,” O’Leary told Investing.com. “The psychedelics space is vastly different than cannabis and legalized recreational use will never happen; psychedelics need to be approved as FDA drugs.”
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Other companies seem eager to follow Mindmed’s lead, as the psychedelic landscape rapidly changes and becomes flush with more cash. Last week, for example, Field Trip Psychedelics Inc. raised $8.5 million in Series A financing, but emphasized their “Triple Bottom Line,” which aims to benefit people and the planet while still making a profit.
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These enterprising moves are in tandem with grassroots efforts to overturn psychedelic prohibition. In less than a year, three U.S. cities have decriminalized plant and/or fungi-based psychedelics, while California could decriminalize access to psilocybin—the psychoactive component in shrooms—at the ballot this November. The U.S. Food and Drug Administration sees extreme promise in psilocybin therapy, granting the drug “breakthrough” therapy status not once, but twice: first to U.K.-based Compass Pathways in 2018, followed by Usona Institute last fall.
It’s a sign that prohibition of psychedelic medicines may finally be reversed, at least in part, but some advocates caution against letting this emerging market become another Big Cannabis or Big Tobacco.
It’s a sign that prohibition of psychedelic medicines may finally be reversed, at least in part, but some advocates caution against letting this emerging market become another Big Cannabis or Big Tobacco.
“A system of regulated psychedelics that focuses on maximizing short-term profit for stockholders would not end well,” says Shaleen Title, a commissioner at the Massachusetts Cannabis Control Commission, who has been outspoken about social equity in the cannabis industry. “We know that prohibition doesn’t work, and it’s crucial that different regulated models are explored based on what’s best for healing, wellness, and public health.”
We’re already witnessing how some corporations may act in this emerging space. In January, the term “psilocybin” was trademarked by a for-profit California company, which frustrated some psychedelic activists. Groups like Decriminalize Nature (the grassroots campaign aiming to decriminalize entheogenic plants and fungi in dozens of cities across the country) are trying to ensure that equity stays at the forefront of the movement.
Other concerns include those who invest in psychedelic companies, such as venture capitalist Peter Thiel, who has backed psilocybin startup Compass Pathways, or the recent appointment of Jeff B. Smith as director and chairman of the board at Flourish Mushroom Labs Inc. Smith is a former ex-chairman of Johnson & Johnson, a company that has its own version of ketamine, and was recently ordered to pay $185 million to four plaintiffs who claim talcum powder tainted with asbestos caused their cancer.
“It is critical that we protect universal and unmitigated equitable access to entheogenic plants and fungi for all people, regardless of their economic status in our community, as all members of our community need healing,” Decriminalize Nature co-founder Carlos Plazola tells DoubleBlind. “We will be circulating a pledge to Mindmed and all other companies seeking to synthesize compounds from plants, fungi, and their derivatives, that they will proactively support the effort to decriminalize nature and protect the public commons from scarcity-creation in the interest of raising profits for corporations. We look forward to their public support to protect these sacred plants and fungi for all people of our planet.”
Photo by Kt Lindsay via Flickr
