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A few years ago, we got an introduction to the legal cannabis industry. Once thought of as something on the fringes of health and wellness, it has now become a multi-billion-dollar market. However, with the opioid crisis, there’s a dire need for alternative medicine focused on mental health. This has sparked blooming interest in advancing psychedelics used in a controlled setting.
What’s more, is that a few market-leading pharmaceutical companies have already begun experimenting. The U.S. FDA granted Breakthrough Therapy Designation to Compass Pathways in 2018. It was for their psilocybin therapy to treat depression. Shortly after that, Usona Institute also received the Designation for its psilocybin therapy for depression disorder. As you may or may not know, these events helped pave the way for the eventual decriminalization of magic mushrooms in places like Denver, Santa Cruz, and Oakland in a new directive favoring experimental medicine.
“A decision (like that) by FDA is the ultimate signal for investors,” said Brad Loncar, a biotech investor with Loncar Investments, who specializes in cancer and rare disease. “It shows that there’s a regulatory path forward for this class of drugs, which typically causes a flood of investment in the area.”
Then you have significant events from some of the biotechnology sector’s leaders, Johnson & Johnson. In 2019, the company received FDA approval for a ketamine-derived medicine called Spravato. Again, this aimed at treatment-resistant depression. While ketamine in its raw form is well-known as a hallucinogen, JNJ was able to derive certain compounds and utilize them in Spravato.
So it makes sense that investors are searching for early-stage opportunities in the same way as they did during the early days of legal cannabis. Keep in mind that those first to market had opportunities to see companies like Canopy Growth, Aurora, Aphria and many others rally from mere pennies to over $50 in some cases.
A Breakthrough For “Mushroom Stocks”?
Citing the initial marijuana stock boom, psychedelic stocks are creating a similar type of buzz. This time around, however, investors appear to be keener on weighing hype against real potential. There’s more of a strategy right now investing in stocks like these compared to the mad dash and blind buying of marijuana penny stocks a few years back.
Earlier this month, UNC School of Medicine reported that the Defense Advanced Research Projects Agency (DARPA) funded a project to create new medicines to treat depression, anxiety, and substance abuse without significant side effects. The four-year, $26,975,142 agreement will give UNC School of Medicine’s Bryan L. Roth, MD, Ph.D., and hit team resources to lay the R&D groundwork.
Roth also directs the National Institute of Mental Health Psychoactive Drug Screening Program, based at UNC-Chapel Hill. He explained, “Although drugs like ketamine and potentially psilocybin have rapid antidepressant actions, their hallucinogenic, addictive, and disorienting side effects make their clinical use limited. Our team has developed innovative methods and technologies to overcome these limitations with the goal of creating better medications to treat these neuropsychiatric conditions.”
Given this significant breakthrough that was reported by UNC this year, how much longer will Wall Street be able to ignore the pent-up demand for opportunities in mushroom stocks?
The key to identifying opportunities early is finding companies with already established operations. It’s also important right now to focus on more than just psychedelic mushrooms alone.
While that’s the sexy story, the fact of the matter is this: the broader industry called mycologicals is set for massive growth right now. Put simply, this is the study of fungi, but there’s so much more to it and understanding that could help identify early opportunities in the new sector.
Mushrooms aren’t just something to consume as food products. The uses expand far beyond and include health & beauty, in addition to medical and legal recreational use of psychedelics. Considering the market opportunities for each of these industries are in the multi-billion dollar range, companies like New Wave Holdings (CSE: SPOR) could have carte blanche right now.
3 Distinct Business Units Creating An Opportunity For Early Brand Dominance
Mainstream attention is focusing on a tiny part of what mushroom stocks are. With it, so far, some of the companies are also taking a narrower approach to this opportunity. But New Wave has quickly found that there’s more to this new industry than just medical-only psychedelics. As a result, the company has taken full advantage of this. Much like how the first movers of CBD and non-psychoactive cannabis products established market dominance early on, New Wave is taking up a similar approach. It’s Key Business Units include:
New Wave Recreational
Much like “seed to sale” in cannabis, New Wave aims to be the “spor to store” operator. The ability to control all steps in the supply chain ensures companies know precisely what is produced and how it’s distributed. Through its acquisition deal with Anahit Therapeutics Ltd., New Wave owns two active farms for mushroom cultivation in Jamaica, which include on-site processing facilities producing. This includes its 5-acre property, High Grade Farms, and MedzUp, a 17-acre property.
Its cultivation facility is modular and built using modified, forty-foot containers for the rapid production of psilocybin mushrooms. Each modular unit has an estimated dry yield of 150 grams per 70-liter tote, yielding an estimated 1,300 grams of psilocybin production per month or 15,600 grams per year with a phase 2 expansion planned to increase the facility’s yield of psilocybin to 78,000 grams per year.
The company also entered into a manufacturing agreement with Kirkman®, an FDA and GMP certified manufacturer, to launch two proprietary functional mushroom products for the North American market. Kirkman is a leading manufacturer of nutritional supplements for individuals with dietary sensitivities and restrictions. In collaboration with Kirkman, New Wave is launching a proprietary, five-mushroom blend supplement under its Anahit Therapeutics brand.
The company even has treatment centers in Jamaica, where psilocybin use is entirely legal. New Wave Therapeutic Retreat Centers allow guests from around the world to engage in personal, spiritual, and emotional health through the use of psilocybin in a controlled environment.
New Wave Mental Health
Much like cannabis, there are recreational and medical areas of interest in this burgeoning industry. Right now, the study focusing on psychedelics is targeting mental health concerns. We’re talking about a market (central nervous system therapeutics) worth nearly $130 billion by 2025. Specific indications for psychedelic used in medicine include things like anxiety, ADHD, depression, and even substance abuse.
The opportunities are becoming even more evident with recent research. New research has emerged and reinforced the idea that psychedelic compounds have the potential to produce more effective mental health treatment options than the pharmaceutical products currently in use. With the FDA granting Breakthrough Therapy Status for things like psilocybin and ketamine, the floodgate could be wide open right now.
New Wave is building a scientific advisory board to expedite the development of its psychedelic medical research portfolio. Following the Anahit acquisition, the company will focus on active psychedelic compounds. This includes developing an IP portfolio focused on psilocybin, LSD, MDMA, and ketamine derived treatments for neuropsychiatric diseases.
New Wave Natural
New Wave’s Altilis Beauty™ brand currently boasts an all-natural product line made from the Polynesian Breadfruit flower, including facial cleanser, serum, gel mask, moisturizer, body butter, and lip balm. Altilis also developed and owns the patent for the process required to extract the flower for production.
Launched in September 2019, sales to date are over $200K in combined domestic and international direct-to-consumer sales via AltilisBeauty.co
Furthermore, its Anahit Natural Health brand is developing a product portfolio to include healthcare and customized products that incorporate legal functioning mushrooms as well as conducting R&D initiatives. The company’s product SKU’s will include cordyceps, lion’s mane, chaga, and reishi mushroom-based: liquid cordyceps, concentrated mushroom powder, tea, chocolate, syrups, elixirs, cold beverages, and nasal spray.
New Acquisitions Fuel Growth
One of the earmarks for success in the market is a company’s growth model. Some will work on expanding their current offering while others will take up an acquisition strategy. In the case of New Wave, they’ve focused on both and has been acquiring and entering into partnerships with several key companies. Late in December of 2020, the company completed the acquisition of Way of Will Inc. Founded in 2016, the company is an aromatherapeutic essential oil-based wellness company based in Toronto, Canada. Way Of Will’s products are aimed at enhancing health, wellness and training by blending essential oils that protect, energize, refresh, relax, moisturize and groom the body and mind.
Via this acquisition, New Wave now gains access to Way’s manufacturing, sourcing, and supply chain. Way manufactures roughly 95% of its products in its Toronto facility. Furthermore, it has 600+ retail and eCommerce distribution channels with key retail clients including Wholefoods, Target.com, GNC, and Dicks Sporting Goods to name a few. The company’s products are also featured on eCommerce marketplaces like Amazon and Walmart.com. Gross sales are expected to be approximately $3.5 M for the year ended April 2021. Gross margins have historically been between 38% and 40%.
In early 2021, Way of Will announced the launch of its high quality new functional mushroom wellness collection. The are primarily focused on health and wellness vs the psychedelic aspects of other mushroom products. The Mushroom Collection is expected to launch mid-March this year.
N2 Logics Inc.
This acquisition followed a joint venture with N2 Logics Inc. N2 acquired one of Europe’s leading CBD and nutraceuticals online superstore distributing various health & wellness products in 2020. An E-commerce strategy will be managed by N2 Logics where N2’s principals possess industry-leading knowledge of nutraceuticals and have a proven track record of producing state of the art innovative E-commerce platforms and experiences.
Bloom has access to over 1,500 SKUs thanks to an exclusive dropship deal. Based on this, Bloom Botanics has become Europian consumers’ go-to source for nutraceuticals and its platform and eCommerce model could enable N2 to continue to expand an already growing portfolio of brand and wellness product offerings.
New Management & Advisory Board Appointments Expand Industry Expertise
New Wave Holdings Corp. (CSE: SPOR)(OTC: TRMNF) hasn’t solely been focused on its product offerings. The company is strategically building its Advisory Board further expanding an industry foothold into psychedelic research. In June, the company brought on Dr. Dennis McKenna, Ph.D. to its Psychedelic Research Advisory Board. He is an internationally recognized expert in psychedelic medicine, an American ethnopharmacologist, research pharmacologist, lecturer and author.
Dr. McKenna was formerly on the Editorial Board of Phytomedicine, International Journal of Phytotherapy and Phytopharmacology. He is a founding board member and the director of ethnopharmacology at the Hefter Research Institute and on the advisory board of non-profit organizations in the ethnobotany and botanical fields.
The company also appointed Dr. Carolyn Myers, Ph.D. to provide business strategy and business development consulting services to New Wave. Dr. Carolyn Myers is an accomplished senior executive with extensive experience creating, growing, and leading health care businesses. She is currently Principal of BioEnsemble Ltd, a business strategy consulting firm that advises C-suite executives of small and medium-size life sciences companies on a comprehensive range of drug development, commercial and business development services. Her previous experience includes stints at PHARMACIA INC, which was acquired by Pfizer, Mylan where she held numerous leadership roles, and Allergan.
Furthermore, New Wave expressed that Dr. Myers will be instrumental in shaping New Wave’s research and development focus in the area of psychedelic compounds, including psilocybin, MDMA, LSD, and ketamine.
The company also appointed Dr. Wade Davis to its Psychedelic Research Advisory Board during the middle of the 3rd quarter. His role is to advise on research that supports the New Wave’s goal of development and commercialization of psychedelic compound-derived neuropsychiatric treatments. He also assists in the development of its IP strategy, acting as a liaison to key industry players and providing such introductions, and supporting New Wave in new developments and providing feedback and insight.
A True Ground Floor Opportunity Attracting Big Investors
Where early investors in cannabis represented something more closely to the customers buying it, mushroom stocks are seeing a surge of notable investors come in early. “Shark Tank” investor Mr. Wonderful Kevin O’Leary and Canopy Growth Corp. CEO Bruce Linton were some of the early investors in the first mushroom stock IPO. Peter Thiel, the multi-billionaire investor, and Paypal co-founder, put big money bets into the industry. Billionaire investor Mike Novogratz has also been vocal about the psychedelic medicine space.
Meanwhile, the addressable markets for medical access to psychedelics are in the hundreds of millions. According to the World Health Organization estimates as of 2020, more than 264 million people of all ages suffer from depression. Meanwhile, 1 in 13 people will develop PTSD at some point in their life. Considering many other mental disorders that psychedelic researchers are working to address, this could be a massive market opportunity.
Aside from that, the world is starting to open up more to the idea of psychedelics. Apart from places like Jamaica and Brazil, over the last year, Denver, Colorado, and Oakland, California decriminalized the possession of products containing psilocybin or psilocin. As popular culture begins to accept the options that mushroom-based compounds offer, it’s not likely that momentum could slow down at that point.
Why New Wave Holdings (CSE: SPOR)
- New Wave Holdings (CSE: SPOR)(OTC: TRMNF) is building a globally focused, diversified business to take first-mover status in a blooming psychedelics & mind medicine industry.
- The FDA has previously granted Breakthrough Therapy Designation to companies for psilocybin therapy, indicating a clear path to success for psychedelic therapy.
- The emerging market for alternative medicine in mental illness has triggered a multi-million-dollar investment rush into psychedelics with investment from Wall Street billionaires like Kevin O’Leary and Peter Thiel as well as significant organizations including DARPA.
- New Wave Holdings (CSE: SPOR)(OTC: TRMNF) has positioned itself to benefit from current legal psychedelics use as well as creating functional mushroom products for addressing the growing interest in nutritional supplements.
- There is a limited number of public companies in the market and few that have the product scope that New Wave (CSE: SPOR)(OTC: TRMNF) currently holds, both recreational and medicinal.
Disclaimer: Pursuant to an agreement between Midam Ventures LLC and NEW WAVE HOLDINGS CORP., Midam has been paid $200,000 for a period from June 15, 2020, to February 26, 2021. We may buy or sell additional shares of NEW WAVE HOLDINGS CORP. in the open market at any time, including before, during, or after the Website and Information, to provide public dissemination of favorable Information about NEW WAVE HOLDINGS CORP.