May 06, 2020 (Baystreet.ca via COMTEX) -- Millions across the globe are struggling with their mental health, and the COVID-19 pandemic is compounding a crisis that has been ignored throughout history.
The U.S. alone spent $89 billion just on mental illness treatment in a single year in 2013, and the roof on those spending figures has disappeared.
When the post-COVID-19 veil is lifted, mental healthcare spending will skyrocket further and the world will emerge in a mental health haze that demands an elixir.
The market for this healthcare segment is again ripe for major innovation, and while medicinal marijuana was the first disruptor, the next one could be bigger.
The innovation will likely come from psychedelics - such as LSD and psilocybin, the active compound in ‘magic mushrooms’ - described by the Wall Street Journal as our return to nature that can help alleviate depression, anxiety and addiction.
And one disrupter will potentially be a little known company called Champignon Brands Inc (cn:SHRM) /zigman2/quotes/217267142/composite SHRMF -2.08% the innovative startup that aiming to position itself one step ahead of the world’s mental health crisis.
With researchers closing in on the third decade of the "second wave" of psilocybin research, a consensus on the strong clinical potential of psilocybin is building among experts in psychiatry and psychopharmacology.
Mushrooms are having a moment, and the market goes far beyond the shiitakes, portobellos and button mushrooms you find in the produce section of your favorite grocery store.
The psychedelics innovation is setting up to compete with the marijuana boom precisely because of their potential to alleviate a mental health crisis that is a pandemic in its own right.
... and Champignon Brands got to this early, by compiling an impressive IP portfolio in the space.
Here are 5 Reasons why you should keep Champignon Brands Inc. (cn:SHRM) /zigman2/quotes/217267142/composite SHRMF -2.08% on your radar.
#1 The Decriminalization Drive in a Struggling World
Nowadays, we are living longer lives than ever before in the history of mankind, thanks to huge medical advancements such as CRISPR gene editing, stem cells, immune reprogramming, electrical brain stimulation, complex organ transplants and smart pills such as PillCams that would once have seemed unthinkable.
Meanwhile, the inexorable march of technology has gifted us with a hodgepodge of devices with an almost impossibly futuristic slant; from quantum computers and humanoid robots to self-driving cars and reusable satellite launchers.
Unfortunately, our fast-changing world has brought some unprecedented medical challenges, chief among them being a rapid increase in mental health issues.
The Journal of Abnormal Psychology has blamed the increased use of smartphones and other digital media for increasing incidences of depression and suicide among adolescents and young adults; a view that is supported by the National Survey of Drug Use and Health (NSDUH).
A CDC surveillance has shown increasing prevalence of mental health issues, with a documented rise in adolescent and young adult (13-25) suicide rates from 8.9 to 11.6 per 100,000, a 30% increase since the turn of the 21st century.
According to the World Health Organization (WHO), 25% of the world’s population will be afflicted by mental health and/or neurological disorders at some point throughout their lives.
The sad truth is that the mental health arena has been frequently neglected over the last 30 years.
It’s little wonder then that the formerly much-maligned ‘magical mushroom’ and psychedelic-inspired medical industry is looking to make a huge comeback.
With growing resistance to current antidepressant medications, more and more people are shunning conventional treatments, which they have to take for the rest of their lives, for radical new therapies of the future such as psilocybin.
These novel and natural treatment protocols have shown in initial research that they are not only effective at treating mental disorders such as depression and Post-Traumatic Stress Disorder (PTSD) but also increase the sense of well-being often in just a few sessions.
Clinical research has not merely helped to sprout an understanding of psilocybin’s potentially vast treatment benefits, but has also multiplied our conviction that transformative medicine like Psilocybin is the future of mental healthcare.
Like the marijuana legalization drive, the psilocybin decriminalization drive is moving full steam ahead.
In 2018, researchers at John Hopkins University released a study analyzing the Psilocybin’s abuse potential, concluding that it should be rescheduled to Schedule IV, where most prescription benzodiazepines can be found.
Psilocybin is currently a Schedule I narcotic, meaning the DEA considers it a drug with high abuse potential and no healing characteristics--the same category as heroin. But this classification is largely farcical, because Psilocybin is neither considered to be addictive nor does it cause compulsive use.
When researchers resumed psychedelics research in the 1990s after a 30-year layoff, they focused on Psilocybin instead of other psychedelics mainly because of its short duration effect - 2-4 hours versus the 12 average hours of an LSD trip - and the fact that it hadn’t been stigmatized as much as many other compounds that had their heyday in 1960s counterculture.
You can think of Psilocybin as the THC equivalent of Mushrooms--but with even bigger potential to treat mental disorders such as depression, PTSD and even help in addiction cessation.
Already, a growing number of jurisdictions have started to actively decriminalize Psilocybin and Psilocybin mushrooms.
In May, Denver voted to make possession of mushrooms a low law enforcement priority and forbid the city from spending public resources on possession charges, becoming the first city in the U.S. to decriminalize magic mushrooms.
Other jurisdictions soon followed suit.
One month later, Oakland voted to end criminal penalties for the use and possession of psychoactive plants and fungi on the basis that the substances have valuable traditional and religious uses.
Chicago could soon be on track to become the next municipality to decriminalize psilocybin use.
Oregon could become the first state to end mushroom criminalization if the psi-2020 ballot passes.
In June, U.S. Rep. Alexandria Ocasio-Cortez, a New York Democrat, introduced a House amendment that would have made it easier for research institutions to study the compound; the measure was rejected in a House vote.
With Psilocybin decriminalization gathering momentum, it may not be long before the compound enters the mainstream mental health and wellness market, exactly as we have seen with medical marijuana.
Champignon Brands Inc. (cn:SHRM) /zigman2/quotes/217267142/composite SHRMF -2.08% is already positioned for that.
#2 Early Mover Advantage + Huge Growth Runways
But just as we witnessed with marijuana, not all players are going to succeed in the bubbling psychedelic market.
Players like Canopy Growth and Aurora Cannabis leveraged their first-mover advantage to dominate the marijuana industry.
Companies such as Champignon Brands Inc. enjoy first-mover advantage in the medical Psilocybin space, are hoping to dominate the alternative medicine renaissance for years to come.
Champignon Brands Inc.’s (cn:SHRM) /zigman2/quotes/217267142/composite SHRMF -2.08% ethos is fully grounded in the mushroom industry, including a very strong executive team and a goal to become the most vertically integrated psychedelic mental healing optimization company.
It owns an ecosystem from research and cultivation to formulations of cutting-edge premium products.
But what’s particularly impressive about this $35M company (market cap) is the Total Addressable Market (TAM) that it has in its cross-hairs.
Psilocybin (Magic Mushrooms), Ibogaine, Ketamine, 5-Me0-DMT, DMT, LSD (Acid), MDMA (Ecstasy) and Mescaline are Schedule 1 Drugs (Psychedelics) that are shown in research to be effective in the treatment of a wide array of mental health conditions including Drug Addiction, Alcoholism, Depression,Migraines, PTSD and Smoking Cessation.
But Psilocybin beats them hands down in efficacy and speed of action.
Many Big Pharma antidepressants just aren’t working anymore, not to mention they come with a boatload of terrible side effects and only work for some patients.
Psilocybin is not only a rapid onset compound and less addictive than many conventional antidepressants, but it is also thought to be highly effective against depression, addiction and Post-Traumatic Stress Disorder (PTSD). It’s also proven highly effective at increasing the sense of well-being--often in just a few sessions.
This gives Psilocybin a great shot at the global antidepressant market valued at $14.3B…
It will also be marketed on decriminalization to the PTSD Therapeutics market that’s expected to hit nearly $11B in six years…
The global functional mushroom market Champignon is looking to penetrate is expected to reach $34.3 billion by 2024, registering a CAGR of 8.04% during the forecasted period (2019 - 2024).
But most importantly...
It will have the massive $4.5 trillion Global Wellness Industry at its feet.
Source: Global Wellness Institute
These are incredible growth runways that Champignon Brands Inc. (cn:SHRM) /zigman2/quotes/217267142/composite SHRMF -2.08% will try to readily exploit for years and decades to come. Runways that will put even Gwyneth Paltrow’s Goop to shame.
Another big advantage: Unlike most biotech companies which are unable to survive if their first bunch of clinical trials fail to come through, Champignon has hedged its bets by acquiring a raft of clinical infrastructure. Champignon’s clinic is the only vertically integrated rapid onset treatment centre operating from proof-of-concept to human clinical trials and publication, with study results in peer-reviewed journals by the world's leading experts in psychopharmacology. Champignon’s clinical infrastructure also serves as a rapid onset treatment training and education center for medical professionals and is equipped with a co-located pharmacy.
The clinic has been licensed by Health Canada to dose eligible patients with psilocybin and is the only clinic in Canada to perform psilocybin doses under Health Canada approval.
These clinics have cash flows and are already profitable which improves revenue visibility. It also means that the company may not have to constantly rush to the secondary markets looking to sell more shares in a bid to raise funds for operations and R&D.
#3 100% Intellectual Property (IP) Ownership
Patents are the lifeblood of the biotech industry.
Biotech companies are responsible for some of the most innovative developments in the world, the majority of which are protected by patents.
Biotechnology is one of the most research-intensive industries, with companies in the sector typically investing between 40% and 50% of their revenues in research and development, compared to 13% in pharmaceuticals and 5% in the chemical industry.
In many cases, IP rights can actually be the final product.