Magic Mushroom Stocks

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These 2 Companies are Turning LSD, Magic Mushrooms, Ketamine and MDMA into the Next Blockbuster Drugs

MARCH 28, 2020
Canabis Investor
By Ryan T.

Early Weed Investors and Business Minds are Positioning Themselves in the World of Psychedelic Medicine as the Flow of Smart Money Hits the Market

Canopy Growth Founder Bruce Linton and Billionaire “Mr. Wonderful” Kevin O’Leary from Shark Tank, Are Going All in on What They Think is a Much Bigger Opportunity Than the Cannabis Boom

Investors Who Missed the Last Bull Market in Weed Stocks or Got in Too Late Should Start Researching the “Shroom Boom” Immediately

There has been a wave of positive developments in psychedelic medicine sweeping North America. Despite currently being classified as controlled substances, drugs like LSD, MDMA, Ketamine and Psilocybin (Magic Mushrooms) are increasingly being used by medical professionals to treat a host of mental disorders.

Ketamine, Psilocybin and MDMA have all been fast-tracked by both the U.S. Food and Drug Administration (FDA) and Health Canada for research and development (R&D) opening the door for the psychedelics industry to blossom.

Psilocybin, also known by many as Magic Mushrooms, has been in the news the most recently, thanks to several positive legislative actions. In 2019, two major cities, Denver and Oakland, decriminalized Psilocybin. Since then, the psychedelics reform movement has continued to gain momentum throughout the United States. Psilocybin activists are now in more than 100 U.S. cities, helping push legislation forward to decriminalize psychedelic plants and fungi. There are also statewide efforts to decriminalize Psilocybin taking place in California, Oregon and Washington.

The psychedelics reform movement came to life as the result of many surprising studies that successfully used substances such as Psilocybin to treat various afflictions like depression and addiction. Kevin Matthews, the campaign director for Denver for Psilocybin, described the movement, “We’re in the middle of the psychedelic renaissance. I think it’s becoming more common because the results—at least the initial results from these studies—are so powerful.”

While the Psilocybin legalization movement is still in its infancy and there’s a lot of research yet to be done into the drug’s medical benefits, it’s likely to follow a similar path as cannabis legalization: start local, expand statewide and push for national acceptance. Much like cannabis, a new industry is beginning to coalesce around psychedelic substances like Psilocybin, Ketamine, MDMA and LSD. One company, in particular, believes they have what it takes to become the leader of this upstart industry, and they’ve made a number of big moves recently that have catapulted them to the forefront of the emerging psychedelics sector.

Introducing Champignon Brands

Champignon Brands (CSE: SHRM) (OTC: SHRMF) (FRA: 496) is a Canadian-based psychedelics and health and wellness company specializing in novel delivery platforms for the pharmaceutical and nutraceutical industries. The company completed its IPO on February 28th of this year and officially began trading on the Canadian Securities Exchange (CSE) a few days later. Champignon describes itself as “pursuing the development and commercialization of rapid onset treatments capable of improving health outcomes, such as depression and post-traumatic stress disorder (PTSD), as well as substance and alcohol use disorders.” The company intends to create the most compelling IP portfolio, clinical pipeline and drug development platform in the psychedelics space.

Champignon’s Plan to Advance Psychedelic Medicine

Champignon Brands’ ultimate goal is to utilize psychedelics, namely Psilocybin, Ketamine, MDMA and LSD, to bring to market scientifically proven medications for the treatment of depression, PTSD, addiction and a host of other mental disorders. The company intends to become vertically integrated, bringing as much of its supply chain in house as possible. This will allow the company to both lower costs and control product quality/specifications, while also giving them the ability to conduct more extensive R&D.

Champignon has been very active over the last few weeks, announcing several transformational acquisitions and projects. First up was the company’s acquisition of Artisan Growers Ltd., a craft mushroom cultivator. Artisan has extensive facilities tailor-made for growing a wide variety of mushrooms. The Artisan acquisition will allow Champignon to bring production of mushrooms for its CPG products in house, saving on costs and improving the company’s R&D abilities.

Within the existing Artisan Growers facility, Champignon has allocated a dedicated laboratory area that will be used for R&D activities and fungi profile analysis. Among its other objectives, Champignon intends to cultivate fungi varietals, which will include Psilocybin.

Next up, Champignon acquired Novo Formulations Ltd., a leading biotechnology company that specializes in developing delivery systems for psychedelic drugs. Champignon intends to leverage Novo’s existing product development infrastructure and licensed affiliates to pursue Psilocybin and MDMA based formulations. The company’s goal is to develop and commercialize rapid onset treatments that are capable of improving health outcomes for individuals suffering from conditions such as depression, PTSD and addiction. The market in North American for pharmacologic DPS treatments currently exceeds $10 billion annually.

Champignon CEO Gareth Birdsall commented on the transformational Novo Formulations deal: “The addition of Novo Formulations allows Champignon to deliver medications in a safer, more effective and more expeditious manner than our peers, from benchtop in the laboratory to preclinical and clinical trials. We are intent on the commercialization of products throughout North America, as rapidly as is safely and effectively practicable.”

Most recently, Champignon Brands announced that it has agreed to buy Tassili Life Sciences Corp., a research company that is partnering with the University of Miami to conduct clinical trials using Psilocybin to treat PTSD and traumatic brain injuries. The acquisition of Tassili Life will provide Champignon with the intellectual property (IP) and scientific team required to develop novel medications.

In collaboration with the University of Miami’s Miller School of Medicine, Tassili will conduct preclinical studies and, eventually, human clinical trials. The objective of the studies is to demonstrate the safety and efficacy of the combination of Psilocybin and Cannabidiol (CBD) in treating PTSD and Mild Traumatic Brain Injury (mTBI) with PTSD. It is anticipated that the study’s final results will be available in 2021.

The collaborative studies will be led by Dr. Michael Hoffer, professor of otolaryngology and neurological surgery at the University of Miami’s Miller School of Medicine. Tassili will retain the exclusive rights to all resulting IP discovery, data and inventions.

“Mild traumatic brain injury, especially concussion, is a significant cause of morbidity worldwide. What many do not realize is that TBI often occurs alongside PTSD. Up to 40% of people impacted by mTBI, a head injury causing a temporary change in mental status or consciousness, or TBI in general, also suffer from PTSD. This combination of mTBI and PTSD is even more common in U.S military members and presents a vast patient population to service and potentially heal with our novel therapeutics under development,” stated Dr. Michael Hoffer.

Tassili Life has also filed four provisional patents, with one patent related to its collaboration with the University of Miami. Tassili’s objective is to demonstrate “that the clinical and physiological effectiveness in PTSD and obsessive-compulsive disorder (OCD) are enhanced by timely measured dosages of psilocybin and cannabidiol, with superior clinical results as measured by objective outcomes.”

2020: Transformation and Shareholder Value

Moving forward in 2020, Champignon Brands has a long list of ambitious plans designed to increase shareholder value substantially.

Last week, Champignon declared its intention to leverage the current undervalued financial markets by conducting a stock buyback. The company announced that it plans to move forward with a Normal Course Issuer Bid, which is a term used in Canada for a type of stock buyback. Champignon’s stock buyback program will look to buy back up to 2.41 million SHRM shares over the next year. All shares purchased during the stock buyback will be cancelled and removed from the company’s outstanding share count. Stock buyback programs can have positive implications for a company’s shareholders. Current shareholders of Champignon Brands stand to see their ownership stake in the company increase each time additional shares are cancelled.

Additionally, Champignon has stated that it expects to successfully biosynthesize Psilocybin within its first three months of laboratory experiments. From here, Champignon will look to optimize and scale its production of pharmaceutical-grade Psilocybin, which the company can utilize in clinical settings.

Beginning in the third quarter of this year, Champignon expects to commence its development of medicinal psychedelics through clinical trials. The company stated that it plans to develop non-hallucinogenic therapies using microdoses of Psilocybin, MDMA and LSD as well as hallucinogenic therapies using high doses of Psilocybin and LSD.

Thanks to drug laws, commercializing any medicine could still be a ways away; fortunately, the company can generate revenue in the interim via its non-psychedelic, mushroom-infused health and wellness products. This side of Champignon’s business operates as a consumer-packaged-goods (CPG) company, developing and branding products to be sold directly to consumers.

The functional food (food that provides more than nutritional value) market is already established and growing. This market has grown from global sales of $18.5 billion in 2016 to $25 billion in 2020; the industry is expected to reach $34 billion in annual sales by 2030.

Champignon’s mushroom-infused functional food product line is highlighted by its flagship brand, Vitality Superteas. The company’s mushroom teas come in a variety of flavours and formulations, each offering a range of benefits, from elevating your immune system to helping with memory retention and sleeping. The teas are also GMO-free, organic and gluten-free, checking all the right boxes that health-conscious consumers demand.

Comparison to MindMed

MindMed (NEO: MMED) (OTC: MMEDF) (FRA: BGHM) is another company looking to capitalize on the medicinal psychedelic movement. MindMed went public the day after Champignon Brands with both companies’ stocks performing very well out of the gate. The company made headlines earlier this year when it was revealed that Kevin O’Leary, of ABC’s hit show Shark Tank, and former Canopy Growth (TSX: WEED) (NYSE: CGC) CEO Bruce Linton, were investors in MindMed.

Unlike Champignon Brands, MindMed is primarily focused on using ibogaine and LSD to treat disorders such as opioid addiction and attention deficit hyperactivity disorder (ADHD). Since MindMed is focusing on slightly different issues, using different drugs, they’re not a direct competitor to Champignon, but they’re about as close as you can find. That’s especially true, considering there’s only a handful of publicly-traded psychedelics firms at this point in time.

Despite the lack of public companies in the booming psychedelics sector, investor demand continues to rise, and it’s being concentrated into stocks like Champignon Brands and MindMed. As it relates to supply and demand, Champignon Brands holds a big advantage over MindMed when it comes to the number of shares in its tradable float. A company’s float is the number of shares that are actually available for trading in the public market. Currently, MindMed has around 10x the number of shares in its float at roughly 250 million, compared to Champignon Brands’s float of only 24 million. It’s important to be aware of this key stat, especially in an investment sector where demand is expected to far outpace supply. During a bull market, low float stocks tend to rise in price much quicker compared to stocks with larger floats.

Psychedelic Investment Opportunity

With the potential to treat many widespread and debilitating mental disorders, psychedelics stand to become stalwarts in the medical field. Leading the new sector forward will be substances such as Psilocybin (Magic Mushrooms), Ketamine, MDMA and LSD. The potential market for these psychedelic drugs could be worth many billions of dollars.

Champignon Brands has the management team, business plan and infrastructure to capitalize on that rapidly expanding market while establishing themselves as the leader of the highly promising new psychedelics industry. As Champignon continues to execute its vision, the company’s low valuation relative to its peers could present investors with an excellent opportunity to achieve an extraordinary ROI.

The psychedelics industry closely resembles the cannabis sector before it began its meteoric rise. For those that missed out on the cannabis boom or bought in too late, the burgeoning psychedelics industry is still in its infancy and is currently presenting investors with a golden opportunity to get in on the ground floor, before Wall Street and the mainstream media take notice.

Recent Price Action and SHRM Stock Chart

Shares of Champignon Brands’ Canadian Securities Exchange (CSE) listed ‘SHRM’ stock recently experienced a strong technical breakout from its Bull Pennant chart formation. Bull Pennant’s are classified as continuation patterns, which indicate SHRM’s current uptrend is highly likely to continue. Along with its rising share price, SHRM’s trading volume has also been increasing. The surge in volume is significant because it helps to validate the breakout.