Where We Are Investing Now: Personalized Psychedelics
Psychedelics have deep potential for personal health. But legal limitations and uncertainty hold this investment area back. Laws for psychoactive compounds vary by country, state, or locality, which include And since this is such a new business, there is scant data or measurable trends to reflect upon for guidance. Only a handful of funds specifically focus here, with very few uniquely qualified investors.
However, the scope of psychedelics is vast. Helpful compounds include LSD, Peyote, MDMA, Ketamine, Psilocybin, Ayahuasca / DMT, and the many mushrooms known to have positive effects on the muscle or brain (e.g., Reishi, Cordyceps, Lions Mane).
More and more supportive research emerges each week about these substances, so perceptions are starting to change, and regulations with them. Academic institutions across the world are conducting studies on the benefits of psychedelic therapy; the University of Lisbon, for instance, found fast and lasting effects using psilocybin to treat depression and existential distress that were otherwise resistant to other treatments. In February, Australia approved MDMA as a treatment for PTSD; the US could soon approve MDMA therapy as well. Recent pharmaceutical breakthroughs are also paving the way for medicinal and therapeutic applications; in January 2020, Jazz Pharmaceuticals received the marketing authorization for solriamfetol (Sunosi) for the treatment of excessive daytime sleepiness in adults with narcolepsy. In August 2020, Janssen Pharmaceuticals received approval for its Spravato nasal spray for the treatment of people experiencing suicidal urges.
Given the extensive and highly promising potential applications, the market potential in psychedelics is, well, mind-blowing. As of 2021, the pharmaceutical industry was valued at $12T, with supplements at $358B and medicinal mushrooms at $7B. A report last year projected that the psychedelic therapeutics market specifically will be worth $8.31B by 2028.
Consumer interest in psychedelics and mushrooms has grown into other categories beyond healthcare as well. We’re seeing exciting brands emerge in the consumer space, with mushroom-inspired beauty products, tea, coffee, and supplements.
Despite all the drawbacks, we think this category holds great promise and will produce companies that will transform lives. So, balancing the untested yet highly promising nature of this young and speedily expanding space, we plan to invest only in:
- Products consisting of ingredients that are legal and generally recognized as safe (“GRAS”), plus sold in a way that falls under the parameters of our food and beverage focus. A good example of this is our portfolio company Gwella, which makes “mushroom products for modern life”: psychedelic-inspired wellness supplements for energized focus, enhanced cognition, and improved mood.
- Regulated substances that are prescribed legally by medical professionals and that fall under our personal health and techbio areas of focus.
If you’re an entrepreneur looking to improve human health through innovative applications of psychedelics, feel free to reach out, we’d love to hear from you.
By Investment Associate Jenna Jung
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