Cannabis markets have seen a resurgence since the pandemic, but global investors had already been eyeing higher opportunities after a collapse in weed stocks late last year – the mind-blowing growth in psychedelics as medicine.
The slump in the cannabis market has created a perfect storm of opportunity for psychedelics with a global market for both medicinal and recreational use estimated to be around $400 billion (USD).
From the movement to legalize psilocybin in several U.S. states – a number of jurisdictions have already decriminalized the active ingredient in magic mushrooms – to the Food and Drug Administration’s designation of psilocybin as a “breakthrough therapy” for major depressive disorder, 2019 was a year of awakening for the psychedelics industry.
Now, 2020 promises to be even bigger as pharmaceutical companies and universities ramp up research and clinical trials to unlock the potential medical benefits of a number of psychedelics, including LSD, MDMA and ketamine.
The benefits of psychedelics, to treat a whole range of conditions that psychiatric and other drugs have proven ineffective (or addictive) in managing, have been known for decades. A team of doctors at Johns Hopkins University recently laid out their argument for easing restrictions on psychedelics to allow clinical trials.
The university’s recent trial on psilocybin for smoking cessation, for example, showed an 80 per cent success rate, more than double any known therapeutic approach, including nicotine replacement therapy.
But Big Pharma – and governments – have been slow to recognize the potential of psychedelics in the treatment of conditions affecting the brain and central nervous system.
Compass Pathways, which counts billionaire and PayPal founder Peter Thiel among its investors, is one of two research institutes now conducting clinical trials on psilocybin.
Funding for Pathways comes from another Thiel-backed venture – Atai Life Sciences, the “biotech platform to heal mental health disorders.”
The firm, which has offices in Berlin, New York and Amsterdam, notes that there has been “little progress since the development of selective serotonin reuptake inhibitors (SSRIs) and serotonin-norepinephrine reuptake inhibitors” in the treatment of mental health conditions. It will be focusing its attention on the treatment of depression, anxiety and addiction through psilocybin, ketamine and LSD, among other drugs.
Atai also recently launched EntheogeniX, an AI-based psychedelic drug discovery platform.
Besides Atai, others are edging into the field. Among them, the Usona Institute, the Wisconsin based non-profit competing with Compass Pathways to approve psilocybin for depression.
Toronto-based Mind Medicine is studying the potential benefits of Ibogaine, a naturally occurring psychoactive found in the Apocynaceae family of plants, in the treatment of addiction.
Field Trip Health, another Toronto-based outfit, has the backing of cannabis giant Aurora for its research into psilocybin.
Vancouver, which is home to one of the few grey market psilocybin dispensaries on the continent, is an epicentre for the burgeoning psychedelics industry with a number of companies involved in building infrastructure for testing and clinical research.
Clinical trials on psilocybin for cocaine and crack addiction are also ongoing at the University of Alabama at Birmingham. There, in a study of 10 patients, some 30 per cent never touched crack again while the others who had a relapse were still well enough to turn their lives around.
Recent data also shows that Ibogaine is 95 per cent successful in treating acute opioid withdrawal symptoms with as little as a single dose.
But regulatory challenges remain.
While nearly 100 cities worldwide are following the lead of some U.S. jurisdictions to decriminalize psychedelics, federal legislation will be required to open legal markets.
While a number of Canadian companies are building production and distribution infrastructure offshore, including in Jamaica, exemptions from Health Canada are required.
There are also liability issues. The withdrawal of other seratonergic drugs like Fenfluramine/phentermine, or Fen-Phen for short, and issues with Imitrex, have raised concerns for the FDA on the possible adverse effects of psilocybin, Ibogaine and LSD.
But the opportunities are many, including in China where interest in plant medicines goes back millennia. Chinese firms are already producing magic mushrooms industrially and exporting them into Canada where they are sold into the illicit market over-the-counter in some Canadian herbal stores.
Meanwhile, Ibogaine, which is a controlled substance in the U.S. and some European jurisdictions, it is not scheduled in Canada and the majority of the global market.
Like any emerging industry, there are challenges and growing pains but the upside for psychedelics is no hallucination.
