Silo Wellness Inc. (SILFF)

[Jose Chavez]

A major barrier to entry in Oregon is the supply of psilocybin-ready real estate and the capital to achieve it. Psilocybin companies cannot operate on either federal land or on any property with a bank mortgage due to it being Schedule I and illegal federally; additionally, all traditional mortgage contracts preclude violating federal law. "From Oregon cannabis we learned that most of the attractive real estate in the premier areas is expensive and traditionally financed, often relegating early commercial dispensary operations to the dregs of the cities and strip malls to buy outright or to lease from unleveraged properties," stated Arnold.

"Psychedelic therapy is all about set and setting and strip malls do not necessarily fit the bill in the metro areas, making desirable space in short supply there. For retreats in beautiful areas, most of Oregon's wild areas are owned by the federal government and the rest are very expensive due to the rarity of commercial spaces in rural Oregon due to our Urban Growth Boundaries and preferential treatment for agriculture and forestry zoning."

One potential problem for Oregon psilocybin businesses, is that the longer a company waits to secure a property, the more of the margins/value will be realized by the landowners rather than the operators, as was seen in cannabis. Hence, the REIT model working out so well in the capital markets for cannabis investors. They owned the land and leased it to the operators. "We believe that Silo, as the first legal mover in Oregon psychedelics operationally and in the public markets, is well positioned with boots on the ground in Oregon," Arnold said.