Sounds like another craze, right?
Images of flower power and the swinging sixties spring to mind rather than a serious investment opportunity.
But don’t let these biases fool you.
For the psychedelic medicine sector has just got off to a sprinter’s start.
The first two IPOs in the space went through in March, and the response has been phenomenal.
Hot money stampeded into these pacesetters while the coronavirus was causing chaos for almost all other companies.
As financings collapsed left, right and centre, institutional investors scrambled to grab as much stock as they could in psychedelics.
MindMed and Champignon are now valued at over $100 million, with professional capital competing aggressively to get in on the next deals.
So, exactly how big is this opportunity?
Well, it’s starting to look we are witnessing the birth of an emerging $100 billion dollar market.
You see, extensive scientific research over recent years has yielded astonishing results.
It turns out that psychedelic medicines have enormous potential to revolutionize mental healthcare and improve the lives of hundreds of millions of people.
A growing bank of evidence suggests that the effectiveness of these treatments far exceeds that of billion-dollar blockbuster drugs designed to treat the same conditions.
The promise is so great that both the U.S. Food and Drug Administration and Health Canada have fast-tracked drug discovery programmes since late 2018.
This official blessing in the United States contrasts starkly with the federal stance towards medical cannabis.
While cannabis remains illegal under U.S. federal law (which has kept institutional money at an arm’s reach), the enthusiastic promotion of research into psychedelic medicine actively encourages large-scale investment.
High technical, and legal, barriers to entry make the sector even more attractive.
After all, only a limited number of companies will be capable of assembling the specialist expertise necessary to develop the next generation of products.
This will create a heavily concentrated marketplace.
Does it now make sense why there is so much excitement around psychedelic medicines?
Let’s break it down a little further;
– Compelling science leading to ground-breaking medications treating huge global patient populations, serviced by a handful of expert companies, backed by vast sums of professional money…
– …the scene is set for the perfect bull market.
And we are right here at its birth.
Now that the spigot is open and institutional funds are flowing fast into psychedelic stocks, the hunt is on for the next big mover.
This company has positioned itself well ahead of the curve, and is primed to seize full first-mover advantage. In a relatively short period of time it has built a solid foundation and it is now ready to start generating significant income.
Psilocybin – the mental health miracle drug
You might not yet have heard of psilocybin, but it won’t be long before it is a household name.
Psilocybin is a naturally-occurring psychedelic compound found in over 200 different species of mushrooms.
Thanks to its potency and therapeutic effects on the brain, the substance is attracting some of the most intense research interest in the psychedelic space.
The health benefits are amazing.
Psilocybin has been shown to enhance mood, cognitive function, creativity, productivity and overall immunity, while at the same time reducing stress and improving sleep patterns.
It is a mental health wonder.
The expectation is that this active ingredient will be at the centre of psychedelic drug discovery for years to come.
They quietly set about developing their offering in a private company, so that they could quickly bring it to market when the time was right.
That time is now, and their foresight is about to pay off spectacularly.
They saw clear parallels between the emergent psychedelic medicine market and what was most successful with the early cannabis plays.
Back in 2016, first-mover advantage combined with a compelling business model was vital. The members of the original cannabis crop that achieved this went on to create businesses worth hundreds of millions, if not billions, of dollars.
The same should happen again with psychedelic stocks, but this time with cooperative regulatory support, a significantly larger pool of growth capital, and a much more concentrated market.
Its drug discovery unit is led by some of the top names in the research of psychedelic medicines. The goal is to develop an IP portfolio focussed primarily on psilocybin, but also incorporating LSD, MDMA, and ketamine-derived treatments. These are obviously long-term projects, but the blue-sky potential is clear.
The company’s second division develops non-hallucinogenic functional mushroom products, including natural beauty and recreational ranges. This division has already sold over $200,000 of merchandise direct to consumers in a soft launch. The plan now is to push through a full launch across North America.
However, it is New Wave’s (CSE: SPOR│FWB: 0XM2│OTC:TRMND) third operating unit that provides its most immediate edge – the world’s first publicly-traded, licensed psilocybin cultivation and extraction facilities.
Through their investment in Anahit Therapeutics, New Wave’s (CSE: SPOR│FWB: 0XM2│OTC:TRMND) founders injected $2.5 million into two psilocybin cultivation and extraction facilities in Jamaica. The country has legalized the consumption, growth and sale of psilocybin, making it the ideal jurisdiction to set up growing operations for export.
The facilities are expected to yield over 15,000 grams of psilocybin every 12 months, which New Wave (CSE: SPOR│FWB: 0XM2│OTC:TRMND) aims to increase to 78,000 grams-a -year in phase two of its development plan.
This ambitious project will put New Wave (CSE: SPOR│FWB: 0XM2│OTC:TRMND) comfortably ahead of the competition as the market for psychedelic medicines heats up. It will be in prime position to become the leading supplier of psilocybin to the psychedelic sector.
It is no surprise that institutional investors have already thrown their weight behind this vision.
And remember, this happened within days of the company transitioning to become the third ever listed psilocybin play, and the first to offer a publicly-traded psilocybin cultivation and extraction operation.
With financing in place, a range of products to sell, and psilocybin cultivation underway in Jamaica, expect to see New Wave (CSE: SPOR│FWB: 0XM2│OTC:TRMND) go full throttle on its meticulously-prepared growth plan.
With the impressive track record of the company’s founders, big things should happen with this stock in the near future.
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Author: Ben Turney
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