Many of us may think of mind-altering drugs like LSD and magic mushrooms used for recreational purposes.
“We’ve seen an absolute explosion of capital markets work focussed on the psychedelic sector,” he says.
Compare that to cannabis, which started as being approved for medical purposes, then moved on to recreational purposes through the federal government changing the law to allow it.
The reverse takeover process finds a shell company that already sits on a public exchange, takes it over and integrates the new company into that publicly traded shell.
“Canadian capital markets have always had a focus on emerging markets and emerging opportunities, and we’ve been doing it for a while,” Foster says.
Its stock soared from a 52-week low of 18 cents to a 52-week high of $2.45 before settling now into its current $1.20 range.
Numinus Wellness received a licence from Health Canada to produce and harvest magic mushrooms and extract and research Psilocybin.
Psilocybin is a hallucinogenic compound found in a species of fungi.
The Horizons Psychedelic Fund currently trades at $9.4 and tracks the North American Psychedelic Index.
Foster says investing in psychedelics is as risky as many other plays in the biotech sector, given how long it takes to develop and get approval for a drug or a delivery model and the risk that clinical trials don’t end up confirming efficacy to gain regulatory approval.
When it gets to the point to mass produce, market, and distribute their product, they hitch their wagon to larger companies through an outright sale, a joint venture or production and distribution agreement.
Foster adds that larger pharmaceutical and biotech companies “are keeping tabs” on the psychedelics plays to see how this space will develop.
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