What is The Shroom Boom?

By Duncan Ferris

Share:

We take a look into the rising popularity of medicinal mushrooms, including an examination of what’s causing the excitement, what the numbers say and how investors can benefit.

The shroom boom is the phrase given to the increasing attention and excitement surrounding psychedelic and medicinal mushrooms.

While people have been enjoying mushrooms and some of their more psychedelic properties for millennia, steps forward in decriminalization and availability have led to a bump in sales and availability.

So, what do you need to know about the shroom boom?

What is Causing the Shroom Boom?

There are several factors which appear to have led to the shroom boom.

First off, people are becoming increasingly concerned with issues like mental health and wellness. This has encouraged people to look beyond traditional methods for treatments and supplements, bringing medicinal mushrooms which might have been common in Eastern medicine to the Western mainstream.

Next, there’s the simple increase in availability.

For example, campaigns to legalize psilocybin, the active ingredient in ‘magic mushrooms’, in the US have existed for decades but really gathered steam in the last 10 years or so. The federal government classes psilocybin as a schedule 1 controlled substance with “no accepted medical use and a high potential for abuse”.

However, since 2019 major cities like Denver, Oakland, Santa Cruz, Washington DC and Seattle have decriminalized the substance. Additionally, the US Food and Drug Administration granted psilocybin ‘breakthrough therapy’ status in 2018 for depression and certain mental health treatments.

Like we’ve already seen with cannabis, it appears that decriminalization is leading to a new crop of mushroom businesses.

With psilocybin appearing to become more readily available to consumers and researchers, it’s no wonder companies are taking more of an interest in mushrooms. But how is the shroom boom reflected in cold hard stats?

Shroom Boom Data

The American Botanical Council’s study of herbal supplement sales in 2020, which was released in the autumn of 2021, showed a 41.8% increase in supplements containing mushrooms. The mushrooms (other) category of supplement ingredients moved from the 23rd top-selling supplement to the fifth between 2015 and 2020, with natural channel sales in this category totaling $15.0m in 2020.

Additionally, the study noted that consumers had spent $2.7m on Chaga mushroom supplements in natural retail stores, earning the ingredient a first-time spot in the top 40 most popular ingredients.

It's worth noting that the mushrooms in these supplements may not have psychoactive properties like psilocybin, though their popularity still speaks to the prevalence of mushroom-based wellness products.

Meanwhile, more recent data from Technavio in May 2022 indicated that the medicinal mushroom market achieved year on year growth of 7.42% in 2021 and will witness a compound annual growth rate of 9.15% between 2021 and 2025. 

The report highlighted the Asia Pacific region as a key contributor to the industry’s growth, stating that it will contribute to 41% of the global market growth during the forecast period. The most significant medicinal mushroom markets in this region were found to be China and Japan. 

Investing in the Shroom Boom

There are a number of publicly listed businesses in the medicinal mushroom space. These include:

However, potential investors should be aware that many players in the medicinal mushroom industry are penny stocks and thus more subject to volatility.

Additionally, these companies are yet to get their products past regulators and through to commercialization, so there is a risk that they will never be able to achieve meaningful sales. However, they could still be the key to getting in on the ground floor of the shroom boom.

Share:

In this article:

Topics:
Psychedelics
Fitness and Wellbeing
Industries:
Healthcare
Consumer Discretionary

Author: Duncan Ferris

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Duncan Ferris does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Duncan Ferris has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

Sign up for VTM Updates

Form submitted successfully!

VTM Exclusive Reports

Crypto Corner

Learn your NFTs from your BTCs