Psychedelic drugs include a range of substances with varying pharmacological profiles that all have strong effects on the consumer’s conscious experience. Such products are borne from research and studies into potential treatments of mental illnesses including addiction, depression and post-traumatic stress disorder. Recent clinical studies show mounting evidence that some psychedelics can help patients with certain mental illnesses. As a result, healthcare and tech investors are beginning to show more interest in the field. For example, the German firm ATAI Life Sciences, which funds clinical trials for what it refers to as “formerly stigmatized compounds,” including psilocybin, announced last year that it had raised more than USD 40 Million in new financing. According to CNBC, Liana Gillooly, a development officer at MAPS, a non-profit investigating the therapeutic uses of psychedelics, with an early focus on MDMA as a potential treatment for PTSD, said that “people are getting behind psychedelic-assisted therapies because they are desperate for real solutions that actually work, and for many, this treatment does.” Numinus Wellness Inc. (TSX-V: NUMI) (OTC: LKYSD), Amyris, Inc. (NASDAQ: AMRS), Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF), Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE), Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT)
The next step for advocates of psychedelic products for medicinal use is to push for widespread legalization. Just like with cannabis and CBD products, legalization efforts will be spread to both the national and local levels. For cannabis, what eventually helped push the market forward was the passage of the Farm Bill in 2018. The Farm Bill legalized the commercialization of CBD-based products as long as they do not contain any more than 0.3% THC levels. Over the past year, CBD products have rapidly proliferated throughout the U.S. and consumers can now easily find CBD products such as tinctures, topicals, oils, and even vapes at their local convenience store, pharmacy, and online portals. The widespread availability of CBD also highlights the massive expansion of the industry, despite it being an underdeveloped market. Overall, the U.S. CBD market alone is anticipated to deliver total sales of over USD 20 Billion by 2024 while expanding at a CAGR of 49%, according to data compiled by BDS Analytics and Arcview Market Research.
Numinus Wellness Inc. (TSX-V: NUMI) (OTC: LKYSD) announced last week, “its near-term goals to advance our mission to address the universal desire to heal.
For 2020, the company plans to upgrade its lab and processing facilities (for both cannabis and psychedelic substances), seek additional licences related to psychedelic substances and cannabis products, identify and build out a second wellness centre and develop psychedelic therapy protocols.
Numinus believes the societal costs of mental illness, addictions, trauma and unmet human potential are much too high. New approaches and new ways of thinking are required to supplement existing options, including the application of psychedelic assisted therapies when approved by regulators.
‘We are not a concept. We are a growth story,’ says Numinus CEO Payton Nyquvest. ‘That means executing on our business plan and advancing each piece of our value chain — one we have in place today.’
Numinus Bioscience, through its wholly-owned subsidiary Salvation Botanicals, has a 7,000 square foot laboratory located in Nanaimo, B.C. and is licensed by Health Canada to test, sell, distribute, and eventually conduct research on psychedelic substances, as well as test and analyze cannabis products. Numinus Wellness is dedicated to therapies that enhance and supplement existing options for people wanting lasting physical, mental and emotional health — with psychedelic treatments at its core when approved for therapeutic and research use. Numinus R&D is creating partnerships with leading research groups to advance practice and understanding in the space. Company plans for 2020 include:
- Upgrade existing laboratory and processing facilities including systems, instruments and the building to obtain GMP compliance to facilitate R&D and clinical studies
- Amend dealer’s license under Health Canada’s Controlled Substances Act to include import/export, packaging and R&D
- Identify and build out a purpose-built facility to complement our existing wellness centre. Psychedelic assisted therapies will not be available at the existing centre and will only be available at our purpose-built facility through research or clinical trials once approved by regulators and governing bodies — a process Numinus is helping to support
- Explore potential acquisition of additional existing wellness facilities in North America
- Establish partnerships to advance Psychedelic Therapy Protocol development, under the direction of Numinus Chief Medical Officer, Dr. Evan Wood
- Pursue American and European securities listings to provide investment opportunities for international markets and engage appropriate investor relations groups to support this process
‘We are building a solid team to deliver on our business plan,’ Nyquvest says. ‘And, revenue from our existing cannabis testing operations provides us a foundation for growth – differentiating us from others in the psychedelics space. This offering will be strengthened by a standard processing/extraction licence from Health Canada which the Company hopes to be granted in Q4 2020.'”
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Amyris, Inc. (NASDAQ: AMRS), a global science and technology leader of pure, sustainable ingredients for the Health & Wellness, Clean Beauty and Flavors & Fragrances markets, announced back in March clinical data showcasing the superiority of its natural sugarcane squalane (marketed and sold as Neossance Squalane) as a carrier of CBD versus other oils. In order for CBD to be effective in topical applications, skin penetration is a key factor. Amyris sugarcane squalene improves the efficacy of CBD by 10-40X as the carrier oil chassis for the skin care market based on new data. Amyris is developing CBD through fermentation technology and believes it will be the first company to provide highly pure and efficacious CBD from this technology at commercial scale. The ability to provide both high quality CBD and the best performing carrier chassis will provide consumers with greater choice and product effectiveness. The company has filed a patent application covering the use of squalane to deliver cannabinoids, including CBD, to the skin to protect its distinctive advantage.
Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF) announced recently that Governor Greg Abbott has signed into law Texas House Bill 1325 (the “Texas Hemp Legislation”), which effectively legalizes the cultivation of hemp and processing of hemp and hemp-derived products, including cannabidiol (CBD) in the State. As previously announced, in anticipation of the passage of the hemp legislation in Texas, Village Farms has begun conversion of half of its 1.3 million square foot, ultra-high-tech Permian Basin greenhouse (which utilizes the Company’s proprietary GATES® technology) for cultivation of high-CBD hemp and CBD extraction. The Texas Hemp Legislation will require licenses for both the cultivation and processing of hemp and Village Farms plans to apply for the requisite licenses as soon as it is permitted to do so. No time frame has yet been provided by the State of Texas for the licensing process.
Zynerba Pharmaceuticals, Inc. (NASDAQ: ZYNE), the leader in innovative pharmaceutically-produced transdermal cannabinoid therapies for rare and near-rare neuropsychiatric disorders, presented data in March further describing the baseline characteristics of the pediatric and adolescent patients in the fully-enrolled Phase 2 BRIGHT trial of Zygel™ (CBD transdermal gel; ZYN002) in children and adolescents with autism spectrum disorder (ASD), indicating that the trial enrolled a broad population of patients with moderate-to-severe ASD. “ASD is a complex neurodevelopmental disorder characterized by difficulties with behaviors, communication, and social interaction,” said Zynerba’s Chief Medical Officer, Joseph M. Palumbo. “Pediatric and adolescent patients with ASD may also present with profound clinical anxiety, above the rate seen in neurotypical children, further complicating their condition and treatment regimen. Unfortunately, current ASD management options are restricted to cognitive behavioral therapy and a small number of approved pharmacologic treatments, highlighting the substantial unmet need for novel therapies in this population. We believe that we have enrolled an appropriate population of patients into our well-designed exploratory BRIGHT trial to enable a robust analysis of outcomes to help inform the design of future double-blind, placebo-controlled studies.”
Neptune Wellness Solutions Inc. (NASDAQ: NEPT) (TSX: NEPT) specializes in the extraction, purification and formulation of health and wellness products. The Company has in excess of 100 customers across several verticals including legal cannabis and hemp, nutraceutical and consumer packaged goods. Late last year the Company announced that it had entered into a collaboration agreement with International Flavors & Fragrances Inc. (IFF) to co-develop hemp-derived CBD products for the mass retail and health & wellness markets. App Connect Service, Inc. is also a party to the agreement to provide related branding strategies and promotional activities. “We are pleased to enter this strategic partnership and drive innovation that satisfies customers’ demands for quality, sustainability and traceability,” said Nicolas Mirzayantz, Divisional CEO, Scent at IFF. “The hemp-derived CBD products we are developing will target consumer preference towards natural health & wellness products.”
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