Just as we saw with the Cannabis space over the past decade, the mushroom revolution is making its way from “niche market” to “main street commodity”.
And the path between those two realities is enormous in market value terms. It was November 2020 when Oregon became the first U.S. state to legalize psilocybin, which is the active ingredient “magic mushrooms” – the source of naturally occurring psychedelic compounds.
Research and Markets recently estimated the psychedelic drugs market will reach nearly $11 billion in annual sales by 2027, expanding at more than 12% per year over the intervening period.
However, comparisons with the cannabis space run deeper – the psychedelic space is in its early innings. And early cannabis stock investors surely remember how treacherous that period can be: while some stocks in the cannabis space, such as Tilray Inc (NASDAQ:TLRY) and Canopy Growth Corp (NASDAQ:CGC), went on to register gargantuan gains over coming years, others fizzled out.
The devil is surely in the details, and stock selection in the group is critical. That goes for both the value plays and the lotto ticket opportunities, such as the second name we cover below.
Mind Medicine (MindMed) Inc NASDAQ:MNMD) is a mainstay in the psychedelics space for traders. MNMD operates as a neuro-pharmaceutical company that discovers, develops and deploys psychedelic medicines to improve health, promote wellness and alleviate suffering.
The firm develops a non-hallucinogenic version of the psychedelic ibogaine.
Mind Medicine (MindMed) Inc NASDAQ:MNMD) recently announced that it has agreed to partner with Sphere Health – a physician-founded employee benefits provider targeting treatments for people with severe mental illness – to collect and analyze multimodal data in order to improve the understanding of a variety of biomarkers associated with mental illnesses including anxiety and affective disorders.
“We are thrilled to have Sphere Health as a partner in this endeavor. As the ways in which individuals use technology to access care continues to evolve, so can our understanding of mental illness and mental health. The use of technology has the potential to offer a level of sensitivity and precision which does not currently exist in our models of these disorders and, we hope, will ultimately lead to better outcomes in our ability to help the folks who suffer from them,” said Daniel R. Karlin, MD MA, Chief Medical Officer of MindMed.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action MNMD shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -5% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -11%.
Mind Medicine (MindMed) Inc NASDAQ:MNMD) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($157.1M against $10.7M).
Cannabis Global Inc (OTCMKTS:CBGL) is the interesting lotto-ticket pick in this list for reasons we will explain below. First off, we should note that the company has partnered with Marijuana Company Of America Inc (OTCMKTS:MCOA) on a project run through the Natural Plant Extract (NPE) subsidiary.
The company has also become a leader in IP (with six patents currently in process at the USPTO) related to food and beverage infusion of cannabinoids and cannabis through its Hemp You Can Feel product line, which is sold on Amazon.com, among other platforms.
Cannabis Global Inc (OTCMKTS:CBGL), in other words, has developed real expertise in leading-edge novel methods of naturally extracting and infusing psychoactive compounds into foods and beverages. But the market hasn’t found this one – it’s trading at a market cap of just $2.4 million. However, the pieces fit together here for something that could conceivably be very interesting if the execution comes together in the months ahead.
Why? Because the company just announced the establishment of a new research initiative to develop novel methods to infuse foods and beverages with psychedelic compounds found in many species of mushrooms, including psilocybin, psilocin, baeocystin, norbaeocystin, and aeruginascin, among others. It also announced, just this morning that it would be locating that initiative in Oakland, which has a track record for open-mindedness toward research into psychedelic compounds, such as psilocybin.
According to the release, a major component of the program will be the development of new ways to infuse both the psychedelic compounds and fungal components into derivative products to improve both bioavailability and taste.
Cannabis Global Inc (OTCMKTS:CBGL) CEO, Arman Tabatabei, commented, “It’s an exciting time for those interested in the benefits of psychedelics as the citizens of California have the capability to sign petitions to add an initiative to the 2022 legislative agenda to legalize these potentially healthful compounds. We certainly support such efforts and plan to conduct research to apply our food and beverage infusion expertise from our years of work in the cannabis sector to this emerging marketplace.”
Cybin Inc (NYSEAMERICAN:CYBN) has been a strong performer among mushroom plays, driving as much as 200% in gains this year for speculators able to time the swings, but also performing well for longer-term buy-and-hold shareholders, posting over 45% upside so far in 2021 as of this analysis.
The company focuses on progressing psychedelic therapeutics by utilizing proprietary drug discovery platforms, drug delivery systems, novel formulation approaches and treatment regimens for psychiatric disorders. It operates through its Serenity Life and Natures Journey segments. The Serenity Life segment engages in the research and development of pharmaceutical and nutraceutical psilocybin products. The Natures Journey segment focuses on non-psychedelic medical mushroom nutraceutical products.
Cybin Inc (NYSEAMERICAN:CYBN) recently announced the addition of Dr. Amir Inamdar as its Chief Medical Officer for its European Operations, the addition of Dr. Geoff Varty as its new Head of Research & Development, the promotion of Lori Challenger to Chief Compliance, Ethics & Administrative Officer, and the promotion of Robert Mino to General Counsel.
According to the release, Dr. Amir Inamdar is a trained psychiatrist and pharmaceutical physician with over 20 years of clinical and drug development experience, spanning both early and late phases. He has progressed numerous drugs from pre-clinical development through to early phase clinical trials, designing and successfully delivering proof-of-concept studies and led teams through marketing authorization applications.
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CYBN shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -4% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -13%.
Cybin Inc (NYSEAMERICAN:CYBN) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($55.1M against $5.8M).
Other interesting players in the psychedelics space include COMPASS Pathways PLC (NASDAQ:CMPS) and Seelos Therapeutics Inc (NASDAQ:SEEL).
