This story, by Sam Riches, originally appeared on the GrowthOp website on March 12, 2020
Before Mind Medicine Inc. rang the bell at Toronto’s NEO Exchange last week, signalling the arrival of the world’s first publicly traded psychedelic company, they held a moment of silence.
It was Stephen Hurst’s idea. Hurst, who has worked in biopharmaceuticals for 35 years, co-founded the company with JR Rahn, a Silicon Valley tech executive who previously worked at Uber, in 2019. Together they are part of a growing movement that’s pushing neuro-pharmaceuticals and psychedelics into the mainstream.
Hurst has brought a secret weapon to Mind Med. For more than two decades, his research team has been developing a derivative of ibogaine, a naturally occurring psychedelic from the root and bark of Iboga — a rainforest shrub that grows across West Africa.
Ibogaine is used as a religious sacrament in some regions of Africa and can induce powerful, discomforting hallucinations. It can also be toxic to the heart, and fatal even months after ingestion. But it has shown promise in treating some of the world’s most destructive and damaging addictions: heroin, alcohol, methamphetamine and opioids.
The derivative, 18-MC, maintains the anti-addictive properties of ibogaine but is non-toxic and non-hallucinogenic. The drug is in phase two clinical trials for treating opioid addiction, which kills more than 130 people a day in the U.S., according to the U.S. Department of Health and Human Services. Research from the New York Times indicates that drug deaths are occurring at a higher rate than at any other time in human history. Meanwhile, mental health disorders have been soaring for the past decade, especially among youth.
This is the backdrop for a revival in psychedelic research. In the 1950s, psychedelics were thoroughly studied and celebrated for their therapeutic potential. Much of the leading research happened in Canada and specifically at the Weyburn Mental Hospital in Weyburn, Sask., where LSD was studied as a treatment for alcoholism and a range of mental health disorders.
In the late 1960s, as recreational use of LSD increased, the perception of psychedelics began to change. Fears of moral and societal decay ran rampant. When Timothy Leary, one of the towering figures of the psychedelic movement, instructed young people to “Turn on, tune in, and drop out,” the popular conception of psychedelics were irrevocably changed. By 1968, LSD was outlawed in Canada and by the U.S. federal government, which deemed it to have no medicinal value.
But the potential never went away. Neither did the research. Some of the leading figures from that period are still alive, like Czech psychiatrist Stanislav Grof, who predicted in the 1970s that “Psychedelics will be for the study of the mind what the telescope was for astronomy, and what the microscope was for biology.”
‘The Antibiotic for Addiction’
In 2017, the U.S. Federal Drug Administration gave MDMA a breakthrough therapy designation for post-traumatic stress disorder. In 2018, they gave the same designation to psilocybin for treatment-resistant depression. In March of last year, the FDA approved a new antidepressant for the first time in decades, a nasal spray that mimics the effects of ketamine.
When used properly, the belief is that psychedelics can play an important role in psychotherapy and make headway where traditional treatments have failed. Momentum is building from medical and grassroots organizations to nonprofits and Silicon Valley financiers.
“We knew that 2020 was going to be the year for psychedelics,” Rahn told The GrowthOp the day after the company went public. “The momentum is there. The science is there. And we were more or less expecting this.”
While comparisons to the cannabis industry are common, Rahn says psychedelics are vastly different, and the potential for the sector is much larger than cannabis.
“There are some folks who think they can apply this cannabis paradigm or way of doing business to the psychedelic market and it’s just not going to happen,” he says. “The market here is 100 per cent medical. We have no desire to be in the recreational psychedelics market and we don’t see one even forming. We are pursuing rigorous science and the FDA pathway, and it’s going to give us access to institutional capital that never came into the cannabis space.”
On the floor of the NEO Exchange, the moment of silence was to remember the lives lost to addiction, Rahn says, and to recognize the millions of people who are currently suffering.
“We’re trying to create the antibiotic for addiction,” he says. “We’re not trying to put people on a pill a day for the rest of their life. What we’re trying to do is actually cure a disease.”
Psychotherapy at Scale
The day after Mind Med went public, another psychedelics company, Field Trip Inc. announced its first medical clinic in downtown Toronto. The space resembles a spa more than a traditional doctor’s office. It is open and airy, with lounge seating, a juice bar and soft light falling on walls of Norwegian moss.
Inside, patients will be dosed with ketamine, which is legal in Canada for medicinal use, and have “psychedelic-enhanced psychotherapy.”
The company is less than a year old and was founded by Joseph del Moral, who previously co-founded CanvasRx Inc., and Canadian Cannabis Clinics, a national network of medical cannabis clinics with more than 20,000 patients.
“There’s definitely a feeling that this is the next big wave in plant-based medicine,” del Moral says. “We’re not encountering the same type of resistance we did when we started our cannabis businesses.”
The clinics are set up to deliver psychotherapy at scale, he says. Additional locations are under construction in Manhattan and Los Angeles. They also have a research facility in Jamaica, where they are growing and studying psilocybin mushrooms in partnership with the University of West Indies. The goal is to have 60 clinics operating across Canada by 2023.
“You have to sometimes do work,” Verbora says. “You have to revisit things that have caused major pain mentally and we want to provide the safest environment to do that.”
The medical director for Field Trip is Dr. Michael Verbora, who is also the Chief Medical Officer for Alefia Health, a cannabis company. Ketamine, Verbora says, is a safe, dissociative drug that works the same way other psychedelics do, by taking consumers out of their “default mode network.”
“We have 99 per cent of the same thoughts every day,” Verbora explains. “Your brain, after age 10 or 11, gets stuck in this circuit, it forms a lot of biases and beliefs about the world. These psychedelics disrupt this pattern of thinking. You wake up the next day and you’re kind of looking at things from a different perspective and questioning a lot of your assumptions. That can be extremely therapeutic because a lot of our assumptions are self-sabotaging and harmful to our health.”
Experiences range from complete ego dissolution to smaller subtle changes to people’s baseline thinking. Insights experienced during the trip are discussed with a psychotherapist and the hope is that those insights can lead to lasting changes in behaviour and patterns of thinking.
“It’s extremely therapeutic just to have a third perspective on your own life, to look at things from a different lens, especially if for 20 or 30 years you’ve looked at life in the same way and it’s made you severely depressed or anxious,” Verbora says.
In the dosing room, patients recline in a zero-gravity chair. They are blindfolded, given bluetooth headphones with a curated playlist, and draped in a heavy blanket. The intention is to replicate a sensory deprivation tank, to increase the intensity of the experience. The ketamine trip lasts about an hour.
A week before opening, a waitlist was already forming. The treatment is not currently covered by OHIP, del Moral says, but they are working on it.
For some patients, the experience will not be easy.
“You have to sometimes do work,” Verbora says. “You have to revisit things that have caused major pain mentally and we want to provide the safest environment to do that.”
Despite the therapeutic potential, Verbora says the medical community remains divided.
“A lot of young physicians feel the future is, instead of taking a pill every day, go for an experience of three sessions of a drug, open up your connections and try and look at the world from a different perspective. See if you get six months, or 12 months, or even longer, of relief. As you can imagine that’s a massive paradigm shift. Those are two very different approaches and there are a lot of people who are going to put up resistance to this.”
But he doesn’t see the momentum slowing. Verbora predicts that within five years, MDMA will be approved for treating post-traumatic stress disorder, psilocybin will be legal for end of life care and anxiety, and ketamine therapy will be much more commonplace.
“I want to help those patients who feel like there are no other options,” he says. “I want to give them hope and I want to give them a safe setting and a safe place to have an expert help them to use these drugs in a new way to give them joy, happiness, and their lives back.”
When you enter the clinic the first thing you see is a wall of the same book, backlit with soft purple light. It is Harvard professor Michael Pollan’s 2018 investigation into the psychedelic reemergence, How to Change Your Mind: What the New Science of Psychedelics Teaches Us About Consciousness, Dying, Addiction, Depression, and Transcendence. The book became a #1 New York Times bestseller.
“When the ego dissolves, so does a bounded conception not only of our self but of our self-interest,” Pollan writes on page 390. “What emerges in its place is invariably a broader, more openhearted and altruistic — that is, more spiritual — idea of what matters in life. One in which a new sense of connection, or love, however defined, seems to figure prominently.”
‘Cannabis is a Product and Psychedelics are a Service’
“I want people to know that there are better alternatives in the future,” says Irie Selkrik, the co-founder and director of Rise Wellness Retreat, a legal psilocybin microdose retreat-based in Jamaica. “We don’t have to keep doing what we’ve been doing. It’s not working.”
Selkirk is also the co-founder of Sansero, a psilocybin life sciences company that’s developing psilocybin-based treatments for mental health disorders, inflammation and addiction.
She has been working with plant-based medicine for more than a decade and doesn’t believe normalizing these therapeutic approaches will be as much of an uphill battle as some might assume.
“Remember that MDMA was legal in my lifetime,” she says. “And people are really looking for better ways to take care of their mental health. In my opinion, this is an evolution and a necessary step as we use more technology-based medicine.”
She understands the skeptics and the critics who say the industry is being propped up by investors looking to score big in a Green Rush 2.0 scenario, but she’s hopeful there will be less “pump and dump” in psychedelics.
“It would be an incredible missed opportunity,” she says. “It’s important that people understand that this is definitely a long term approach to meaningful change in the way that people take care of their mental health.”
There are also lessons from the cannabis industry that can be applied to psychedelics. “For those of us who created real businesses coming from a place of expertise and understanding of the industry, not just hopping over, that’s where you see success in the cannabis industry,” she says.
“This is a rising tide. And the markets are there to push this forward socially, as well.”
Mark Haden, the executive director of the Multidisciplinary Association for Psychedelic Studies (MAPS) Canada and an adjunct professor at the University of British Columbia, agrees with that characterization. “They’ll be a huge number of people who want to improve treatments and a lot of people who want to make money and both will come together and legalization will move forward,” he predicts.
Haden worked as a supervisor at Vancouver’s Pacific Spirit Community Health Centre for 28 years. Through that work, he witnessed how unsuccessful traditional treatments were for many people. “I spent my career trying to help people with addiction and we weren’t very effective,” he says. “There are many people who see the lack of effectiveness in traditional treatments and yearn for something more effective and psychedelics seem to be the most promising thing on the horizon.”
He distinguishes between the cannabis industry and psychedelics, explaining that “cannabis is a product and psychedelics are a service.”
“Cannabis can be safely consumed by most adults, without doing harm to themselves or others. Psychedelics need a container of safety that needs to be structured.”
He also sees therapeutic potential for otherwise healthy adults.
“For adults who would like to have a mystical experience at some point in the future, it would be reasonable to allow those folks to have that experience, but again, it has to be wrapped in a container of safety. And so having a new profession that is there to guide these experiences makes complete sense to me.”
After a lifetime of work and research, Haden is optimistic about the future of psychedelics and the momentum building behind the industry.
“At this point in our human history, we certainly need to have access to psychedelics,” he says. “There are a lot of untreated mental health conditions. And we can certainly improve our bonding to each other and improve our bonding to nature. That’s where we’re hoping to go in the long run.”
Kevin O’Leary, of Shark Tank fame, is perhaps one of the last people you might envision championing this industry. But about 18 months ago, he invested in Mind Med.
Bruce Linton, considered by many to be one of the architects of Canada’s cannabis industry, is also an investor with the company. O’Leary stayed out of cannabis and doesn’t plan on changing that, but psychedelics, he says, is a different ballgame.
“When I first got approached on this one, my initial reaction was no, this is another cannabis situation with a schedule one narcotic,” he says. “But the more I investigated it, the benefits of just pursuing one outcome, such as solving, or at least helping, opiate addiction, was a multibillion dollar business. And that’s when I started to do some due diligence.”
He defines psychedelics as a binary investment. “The returns could be extraordinary, or it’s a zero,” he says.
“That’s the way you have to look at developing new medicines, you don’t know. But then I started to talk to some of the sovereign wealth and the pension plans that I work with and they were just as intrigued. This is not a secret. People have been looking at the space now for a few years.”
O’Leary says there is “tremendous” potential for institutional investment and that it will be needed to finance clinical trials in multiple jurisdictions and countries.
“FDA approved trials are very expensive. And so as the industry grows, and they keep hitting milestones, and proving efficacy, you’re going to get a lot of capital coming out. And that’s my basic premise of why I invested. The entire medical community is looking for solutions. The government’s looking for solutions because it’s a multibillion dollar cost to enterprises in America, Canada and Mexico.”
O’Leary also hears in his day to day how effective psychedelics can be. Microdosing in Silicon Valley began to gain traction about six years ago. Steve Jobs, Tim Ferriss, and many others, have all publicly discussed how microdosing psychedelics has improved their work output and creative problem solving. Bill Gates has even hinted at it.
“I don’t endorse this at all, but there’s all kinds of anecdotal evidence right now, particularly in areas like engineering and coding, where microdosing is going on illegally and having some very positive outcomes,” O’Leary says. “Now, I don’t endorse it. I’m totally against it. It’s illegal. But, you know, I hear it every day. I work in the tech industries and I talk to engineers all the time, and it’s going on all over the place, and they’re getting great outcomes. People with ADD, great outcomes. People that have difficulty concentrating, great outcomes. So when I hear that, I want this research to go on, and I certainly want to be part of it as an investor.”
Before joining the company, Rahn made a handshake deal with O’Leary that Mind Med would never pursue the recreational market. “He said ‘If you ever invest in or develop recreational psychedelics, I’m out, and I’m selling all my shares and you’re on my hit list,’” Rahn says. “So, you know, I think that’s very clear.”
Rahn believes that if you can provide something of value to society, it will lead to a successful business, and that’s where he sees psychedelics heading. “We are doing good work here,” he says. “It’s not just about a stock listing. It’s going to be a big business but it’s also going to have a big impact on society.”
Teaming with O’Leary — whose moniker ‘Mr. Wonderful’ is somewhat at odds with his sharp-tongued, no-nonsense image — required looking past reputation. Something similar is happening within psychedelics.
“I’m an advocate for this now,” O’Leary says. “There is no other solution right now and there’s a massive multibillion dollar problem. This research is of great interest to many regulators, many politicians, and many leaders. I’m optimistic.”