Psychedelics and magic mushrooms are all the rage these days. This is the new hot sector for investors to be in. We started covering the sector back in September with our bullish call on Mind Medicine (MMEDF) at $.34 a share, which you can read here. Subscribers are now sitting on gains of over 900% in MMEDF.
MMEDF is just one of many psychedelic plays running right now. Revive Therapeutics (RVVTF) is another psychedelic play running, which we just covered and you can read here. RVVTF is a 308% runner over the past few weeks and looks set to keep running.
In this article, we take a look at a new psychedelic play for our readers. The best part is that it just started trading and investors can buy-in at the same levels as when we recommended MMEDF. The stock is Psyched Wellness (CSE: PSYC) (OTCMKTS: DCNPF).
Psyched Wellness Ltd. is a Canadian-based health supplements company dedicated to the distribution of mushroom-derived products and associated consumer packaged goods. The Company’s objective is to create premium mushroom-derived products that have the potential to become a leading North American brand in the emerging functional food category. The Company is in the process of developing a line of Amanita muscaria-derived water-based extracts, teas, and capsules designed to help with three health objectives: promote stress relief, relaxation, and assist with restful sleeping.
The Psychedelic Industry
It is now legal to take psychedelics in Oregon and parts of Canada. However, the recreational market is not where the big money will be made. The real money in psychedelics will be made from FDA approved drugs for the treatment of depression and mental health.
Depression is a common mental disorder affecting more than 264 million people worldwide. Mental health disorders are on the rise in every country in the world and could cost the global economy up to $16 trillion annually by 2030.
Industry analysts believe the psychedelic sector could bring in over $6.85 billion by 2027 and that number does not take into consideration a blockbuster drug being approved that will make life easier for those 264 million people suffering from depression.
The New Cannabis
In September, London-based Compass Pathways (NASDAQ: CMPS) became the first psychedelic drug company to reach a billion-dollar market cap when it went public on the Nasdaq. Its backers include billionaire investor and PayPal co-founder Peter Thiel and ex-hedge fund manager Michael Novogratz.
Investors see psychedelics as the new cannabis for a number of reasons. For one, they are not relying on state-by-state approvals. Psychedelic companies are really small-cap biotechs focused on research and are not after the recreational market.
Second, the COVID-19 pandemic has created a huge spike in mental health conditions. This summer, the Centers for Disease Control reported 11% of American adults considered suicide, while a whopping 40% said they were struggling with mental health or substance abuse.
Psychedelics offer an alternative to traditional medicines that are treating things like depression, addiction, and anxiety. These types of drugs are just seeking to numb and mask the issues that surround these illnesses. So, things like Xanax, while they might make you feel better, can also be highly addictive and are not dealing with the underlying problem.
Money has poured into psychedelic research and an entirely new sector has established big-name investors jumping in. Shark Tank’s Kevin O’Leary, former Canopy Growth CEO Bruce Linton, and PayPal billionaire Peter Thiel have all made significant investments in companies doing psychedelic research.
The latest big name to jump in is Aurora Cannabis (NYSE: ACB) founder Terry Booth. Terry Booth has over 27 years of experience in tightly regulated government industries.
Appointed CEO in December 2014, Booth grew Aurora from a start-up into one of the world’s largest and fastest-growing companies, valued at $18B at its peak, with the focus on providing high-quality medical and recreational cannabis products.
“In my opinion, the opportunities that exist for this non-addictive, age-gated, safe recreational fungi or a prescribed micro-dosed psilocybin drug has significant global market potential.”
In addition to Terry Booth, Psyched Wellness is led by CEO Jeff Stevens who has over two decades of capital markets experience. Stevens has managed to assemble a notable board of directors, which contains current executives of Juul Labs Canada as well.
Another standout on the board of Psyched Wellness is Professor David Nutt. He is a psychiatrist at the Edmond J. Safra Professor of Neuropsychopharmacology in the Division of Brain Science, Dept. of Medicine, Hammersmith Hospital, Imperial College London and is the Chair of the Scientific Advisory Board for Compass Pathways (NASDAQ: CMPS).
“As a recent pioneer in the field of psychedelic medicine I have long been fascinated by the centuries-old use of Amanita Muscaria. When Psyched Wellness offered me the chance to bring this novel psychedelic mushroom into modern science and medicine, I jumped at it!” said Professor David Nutt.
His research area is psychopharmacology – the study of the effects of drugs on the brain, from the perspectives of both how drug treatments in psychiatry and neurology work, and why people use and become addicted to some drugs such as alcohol.
Amanita Muscaria is an edible psychedelic mushroom that has never been classified as a scheduled drug. It is the iconic red and white-capped mushroom that has been used to illustrate generic wild mushrooms in children’s books, pictograms, and cartoons.
The children’s novel Alice’s Adventures in Wonderland, describes Alice encountering mushrooms with the ability to create distortions in her visual perception. Due to its vivid orange/red appearance, white spots, and psychogenic properties, Amanita Muscaria is often used as the image for psychedelic mushrooms.
In a recent toxicology assessment, it was found that Amanita Muscaria should be classified as a functional psychedelic mushroom. It is consumed as food across Europe, Asia, and North America. It is anecdotally used to assist people suffering from various health issues including inflammation, anxiety, restlessness, brain fog, and addiction. In larger doses, it generates psychoactive effects.
Amanita Muscaria has been mislabeled as poisonous. Amanita Muscaria is NOT poisonous and does NOT contain enough Muscarine to cause harm to humans. The muscarine levels in Amanita Muscaria are clinically insignificant.
Jeff Stevens, CEO of the Company, said “Amanita Muscaria belongs to a family of mushrooms that has some very poisonous and toxic mushrooms and has been mislabeled as poisonous. The fact that it has been mislabeled presented us with the opportunity to be the only company we are aware of to study Amanita Muscaria for both the medicinal and psychoactive qualities. We have completed the work with our CRO partners and determined that we can safely and efficiently extract the psychoactive compound, Muscimol from Amanita Muscaria and we are very excited to continue our studies with the goal of developing new novel uses for Muscimol.”
Psyched Wellness and Amanita Muscaria
Psyched Wellness just completed its first extraction of a legal psychedelic derived from Amanita Muscaria mushrooms. The scientific team sourced dried Amanita Muscaria Mushroom caps from five separate suppliers from different geographic regions around the world.
David Shisel, COO of the Company says, “Our scientific team is working around the clock to ensure we achieve these key milestones in a timely fashion. Once we finalize our specifications, we will be able to produce our first large-scale extraction that will be used for our pre-clinical trials, the accelerated stability tests and all of our scientific needs.
The dried Amanita was extracted using the Company’s proprietary extraction protocol and was then packaged and sent with samples of the raw materials to an independent lab. The lab will be testing the extract for the necessary and desired compounds with the goal of providing the Company with a report within 5-7 days.
The report will allow Psyched to finalize the specifications for its flagship product, a pure, natural, and safe for human consumption Amanita Muscaria extract.
Psyched Wellness Bottom Line
Wall Street is looking at mental health and addiction, potentially, as America’s next great growth story. Psyched Wellness is one of the best ways to play this boom with its market cap of just $32 million. When you look at the team behind Psyched Wellness and see that the Chair of Compass Pathways’ Scientific Advisory Board is also a Director of Psyched Wellness, things get exciting as you can imagine the potential, especially when you look at Compass Pathways and its $1.8 billion market cap. This makes Psyched Wellness a steal at current levels. We don’t think shares will remain this cheap for much longer. Look at what happened with MMEDF after we wrote it up!
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.