2020’s bull market was one of the most tremendous runs that the stock market has seen in at least the past 10 years, with new highs being seen pretty much every week. Skeptics of the market condemned this period, stating that it was just a bubble forming, as the economic condition underpinning the market was getting worse by the day.
Interestingly enough, with vaccines being actively administered and unemployment on the decline… the market seems to be cooling off. We’re seeing signs of weakness as investors lock in their bull market gains and roll their portfolios away from many speculative stocks, to invest in beaten-down value stocks instead.
There are, however, certain industries and market trends that seem to be pushing ahead through the market uncertainty, leading us to believe that we can officially call out “winners” from the bull market.
What started in 2019 as an interest of the uber-wealthy has grown into a full-fledged revolution of the mental and physical health industry. We’re talking about the exploration and development of mushrooms.
Whether psychedelic or not, these fungi-focused companies are helping create breakthroughs and developing their way straight through a shaky market.
1. NeonMind Biosciences (Canada: NEON) (U.S.: NMDBF) (Europe: 6UF)
NeonMind Biosciences is using psilocybin, the psychedelic component in ‘magic mushrooms‘, to tackle eating disorders, with obesity as a central focus. The company is exploring the efficacy of large-dose psychedelic treatments and the potential of daily, microdose treatments to help break the neurological patterns that are behind these food-related illnesses.
This kind of company is what we call an ‘asymmetrical bet’, as they have the potential to take off if any one of their ongoing research projects comes out with a favourable result.
- Active trials taking place at the University of British Columbia in Canada, led by internationally recognized neurologist, Dr. C. Laird Birmingham, an expert in eating disorders.
- NeonMind has 8 U.S. Provisional and 2 International PCT patent applications in place, which would earn them secured IP until 2041.
- CEO of the company, Rob Tessarollo, was previously CEO of MindMed and is a 20+ year industry veteran.
- Engagement of a drug development organization, to start converting intellectual property into cash-generating products for the business.
- Data from preclinical trials expected in Q2 of 2021.
- Patients to be enrolled in Phase 2 clinical trials by Q4 of 2021.
2. Core One Labs (Canada: COOL) (U.S.:CLABF) (Europe: LD62)
While most companies focus on the brain and the changes that can take place, Core One is focused on the infrastructure of the psychedelic movement. In this way, we’re considering them the “pickaxes and shovels” player within the Shroom Boom.
With a portfolio of acquisitions under management, Core One has exposure to secure psychedelic delivery methods, clinics for licensed drug-assisted psychotherapy, and, of course, research for psychedelic drug potential for the human mind.
- Patent-pending sublingual compound delivery strips (aka, Listerine strips… but for psychedelics), access to one of only three psychedelic licensed labs in Canada, a full-service digital mental health platform built by one of the leaders from the Canadian cannabis movement, and other such acquisitions.
- Low-cost, biosynthesized psilocybin production through subsidiary, Vocan Biotechnologies. This allows Core One to eventually produce and sell the magic from magic mushrooms to all other companies attempting research with the compound... as well as their own subsidiaries and partners.
- Core One Labs has applied to list their shares on the NASDAQ to broaden their exposure to investors, with a broad base of retail investors.
- Continue their geographic expansion throughout the United States, as shown through recent acquisitions within the U.S.
- Commercialize psilocybin production and begin sales to other psychedelic businesses.
3. Rritual Superfoods (Canada: RSF) (Europe: 0RW)
The only non-psychedelic mushroom stock of the group, Rritual Superfoods is focused on the functional mushroom and superfood markets, which are growing at an alarming rate. Superfoods alone are estimated to be worth US$137B, and this number is expected to double by 2025.
Aiming to be the first premium option widely available throughout the U.S., this company brings together proven industry experts from the consumer packaged goods (CPG) industry to take early market share within a currently fractured, unsophisticated market.
- Led by David Kerbel, 30-year CPG industry veteran who previously led sales for Celsius Holdings ($CELH), a public company with a US$3.75B market capitalization.
- The team retains connections with several industry giants such as: Walmart, Costco, Walgreens, CVS, Safeway, and more.
- Rritual achieved organic certification for their products in 6 weeks – a process that normally takes 6-9 months.
- Completed commercial manufacturing of superfood elixirs and is expected to complete a 200% larger production run in April 2021.
- The company has already established distribution with Rite-Aid and will be rolling products out throughout Q2 and Q3 2021, to eventually scale up to 1,000 stores across the network, as well as Rite-Aid’s ecommerce platform.
- Prove efficacy of third-party logistics partner, with established automation process to sync with major physical and ecommerce retailers throughout the U.S.
- Continue scaling operations to meet expected demand whilst engaging with further distribution partners.
While we firmly believe in the growth of the mushroom market, there are other markets that we’re seeing massive growth in, despite a weakened speculative market.
Disclaimer: NeonMind Biosciences, Core One Labs, and Rritual Superfoods are communications clients of Edge Investments. We own shares in the companies.