Lorne Gertner is getting into the magic mushroom business.
After two decades in the legal cannabis world, the co-founder of Tokyo Smoke will announce his first foray into psychedelics on Monday. Mr. Gertner will become chairman of a new company devoted to producing pharmaceutical products with psilocybin - the psychoactive (and still broadly illegal) substance that occurs naturally in certain mushrooms - as a core ingredient.
The company is being formed through a merger of Mr. Gertner’s most recent venture - CannaGlobal - with Sansero Life Sciences and Rise Wellness. Sansero co-founder Steve Sadoff will serve as CEO of the new entity, which will temporarily be called ‘CannaGlobal Wellness’ until a third-party branding firm determines a permanent name.
Armed with a combined valuation of C$25-million, Mr. Sadoff said much of the new company’s cash resources will be devoted to a multimillion-dollar years-long pharmaceutical development program.
“Ultimately we want to bring to the marketplace novel pharmaceuticals designed as replacements for antidepressants and stimulants for ADHD,” Mr. Sadoff said in an interview.”
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“That is where we will be taking the bulk of those funds and applying it to the pre-clinical trial work as well as the phased trials associated with getting approvals from the appropriate regulatory bodies. That would be important to bring these novel pharmaceuticals to life and to launch them in the marketplace.”
Some studies have suggested psilocybin could be used to help treat anxiety and depression, though no major regulatory body has ever approved a psilocybin-containing drug for medical use. The United States Food and Drug Administration (FDA) is clearly impressed by the early work being done in the space, but most experts believe psilocybin-based pharmaceuticals are still years away from the mass market.
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“The interesting thing we are finding is that it is a pharmaceutical company but in psychedelics it is not as expensive as the typical drug development process,” Mr. Gertner said in an interview, noting much more clinical research has been done on psilocybin compared to, say, cannabis.
“The novelty lies within the efficacy of these molecules being brought together in very specific ratios,” added Mr. Sadoff, “which we are ultimately finding is more effective and also safer when compared to other antidepressants that are currently available.”
Nobody is expecting a future legal mushroom market to be worth tens or even hundreds of billions of dollars, as many still expect of legal cannabis. It could get into the billions, however, if projections largely based on broad comparisons to the roughly US$15-billion value of the global antidepressant market are to be believed.
Some U.S. cities such as Denver have passed local mushroom legalization measures but national and international reform efforts are nascent at best.
Despite the long road ahead, Mr. Gertner said starting this business reminded him of 2002, when he became involved with Prairie Plant Systems; the first legally-authorized medical cannabis producer in North America.
“I was looking to, call it reinvent myself and I was looking to do something sort of new and I made a shopping list of things that were important to me and what has always been important to me in business was making the world a better place,” Mr. Gertner said. “Doing it in my own backyard, meaning could I do it in Canada? Was it a billion-dollar opportunity? Could we make people’s lives better?”
“I really sat down and saw that [psilocybin] meets all of that criteria and I was all in.”
The man known as the Godfather of Canadian cannabis has attempted to reinvent himself before, though never this far outside the weed world.
In 2019, roughly one year after selling the Tokyo Smoke business he started with his son Alan to Canopy Growth Corp. for C$250-million, Mr. Gertner launched a cannabis consumption lounge business called MoCanna.
He started making small investments in the psychedelics space about a year ago - “dipping my toe in” he said - but it wasn’t until he read Michael Pollan’s How to Change Your Mind about six months ago that he decided to dive in with both feet.
“I was a little skeptical about the whole space and reading that book was one of those inflection points where I thought ‘wow’; Michael Pollan was my contemporary and it just sounded like my story,” Mr. Gertner said.
“Then it was just sort of really doing research and the more I learned about it the more I thought this was something I really need to do.”
Monday, July 6, 2020