(If you expect to walk into a store and buy psilocybin, prepare to be disappointed)
The promise of medicinal psychedelics is real, but if investors are expecting a market similar to cannabis, they’re missing the mark.
It’s understandable to get caught up in the excitement surrounding the alternative plant medicines that are
showing tremendous potential. Positive clinical results for treatments of depression, PTSD, and substance-abuse disorders have led to
investors and companies alike seeing the “next big thing” on the horizon and trying to get in, and they’re right. These problems affect almost everybody on some scale, making for a potentially gargantuan market.
Many compare the nascent psychedelics market with the growing cannabis industry, and experts agree that the legalization of cannabis helped to lay the groundwork for psychedelics to enter the market as well. At the recent Lift & Co Business Conference in Vancouver, a psychedelics panel highlighted some of the recent and historical work done in psychedelics research, and what may be done next.
But when it comes to commercialization, psychedelics are going to be worlds apart from cannabis. Unlike the personal administration that cannabis consumers can use, the panel highlighted that psychedelics aren’t a self-administrating medicine, and each psychedelic is completely different from the others. Mark Haden, executive director of
MAPS Canada, one of the organizations leading psychedelics research, said that equating psychedelics to cannabis is “a huge mistake.”
“If you’re assuming we’re just going to sell psychedelics in the same way that cannabis is sold, you’re not understanding the paradigm,” said Haden at the panel. “Cannabis is a product. Psychedelics are a service. It is a completely different business model.”
(Panelists discuss the psychedelics market at the Vancouver 2020 Lift & Co Conference)
Cody Callon, the lead therapist for Psychedelics Research at the
BC Centre on Substance Use (BCCSU), told Stockhouse Editorial he agreed with the panel. The BCCSU is currently engaged in
Phase III of a clinical trial on the use of MDMA for patients suffering from PTSD, and over a phone interview with Stockhouse, Callon also said the Centre hopes to submit Phase II clinical studies into psilocybin’s effects on alcohol use disorder and opiate use disorder to Health Canada within the next few months. In his experience, ongoing studies indicate that the positive effects of psychedelics come from combining the medications with therapy.
“We’re not even
talking about treatments where someone goes into a pharmacy, gets their prescription for psilocybin, and then has an experience at home,” said Callon. “That’s not what’s being explored at the moment.”
In fact, one of the consensus expert opinions points out that thinking of psychedelics as simple miracle drugs can not only be dangerous without proper administration, but also reduce the overall efficacy. The Lift & Co psychedelics panel told audience members that clinical trial participants who believed that psychedelics would “do all the work” brought down the success rate of trials.
So what will a psychedelics market look like? Replace dispensaries in your mind with clinics and spas and you’re on the right path. Companies will likely own clinics or work with them in authorizing, consulting, and providing training, and while the psychedelics themselves can’t be patented, they’ll still need to be massively produced and improved upon by biopharmaceutical companies.
The biggest thing still holding the market back is research and funding for research. Callon highlighted many organizations doing work in progressing psychedelics, and many ongoing studies that show amazing potential, but at the end of the day, he said the research “needs to be done.” The panel agreed, echoing that additional research helps out Health Canada, helps out investors, and makes the path to market simpler, whether it’s through legalization, decriminalization, or something else.
Some of the highlights of the progressing psychedelics paradigm are
ground-breaking studies and committed companies and
organizations. Investors likely know that both psilocybin and MDMA have been granted
breakthrough therapy status by the FDA for depression and PTSD treatment, respectively, and universities like Johns Hopkins University in Maryland have been able to secure funding for research into the drugs (to the tune of
$17 million in donations).
On the organization front, MAPS and the BCCSU are joined by private company
Compass Pathways and non-for-profit
Usona Institute. Callon also highlighted two Canadian companies working to produce the necessary GMP-grade psychedelics for research and administration,
PsyGen in Calgary and
Numinus Inc. in Vancouver and on Vancouver Island.
Additionally, Stockhouse users have been keeping their eyes on
Yield Growth Corp. (
CSE:BOSS), a cannabis company pushing research into psilocybin, and
Roadman Investments Corp. (
TSX-V:LITT), a psilocybin venture capital firm.
FULL DISCLOSURE: Numinus Inc., Yield Growth Corp., and Roadman Investments Corp. are clients of Stockhouse Publishing.