A Visual Guide to Investing in Psychedelics
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A Visual Guide to Investing in Psychedelics

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The following content is sponsored by Tryp Therapeutics.

A Visual Guide to Investing in Psychedelics

The psychedelics industry has exploded in recent years, presenting new opportunities for investors as it continues to grow and evolve.

Due to its potential to revolutionize medicine as we know it, an eye-watering increase in capital flows have been pumped into the market, spurring its development even further. But given the complexities of the industry, it is by no means easy to understand.

The graphic above from our sponsor Tryp Therapeutics provides a visual overview of the major sectors that make up the multi-billion dollar psychedelics industry, as well as some of the most active companies that operate within each of them.

The Psychedelics Industry, Sector by Sector

According to Psilocybin Alpha, there are eight major market segments (based on different stages in the supply chain) that make up the psychedelics industry today.

The companies mentioned in the graphic exhibit substantial activity within each segment but it is not an exhaustive list. Some of them are also exploring different focus areas, and therefore may appear across numerous segments. Let’s dive in.

Supply and Manufacture

[Cultivation, synthesis, and other production of psychedelics.]

This segment includes companies in the industry that currently manufacture psychedelic drugs synthetically or operate cultivation facilities. Others that fall in this category possess (or plan to apply for) licenses to cultivate or produce psychedelics.

When it comes to synthetic manufacturers, the companies operating in this space believe that this approach could generate more consistent pharmaceutical-grade yields at a lower cost compared to existing methods of extraction.

Clinics and Retreats

[The delivery of psychedelic therapies via clinics, retreats, etc.]

Regulated psychedelic therapies are gaining popularity across the globe through ketamine clinics and psilocybin retreats to name a few.

While access to legal therapies is not yet widespread, there are many companies in this space leading the way for regulated experiences. Amsterdam-based Synthesis, for example, partners with Imperial College London to collect and analyze guest data to improve the efficacy of these programs.

Adult Use and Microdosing

[Recreational use of legal psychedelics.]

While psilocybin, or magic mushrooms as they are more commonly referred to, are illegal in the Netherlands, magic truffles are not.

Even though truffles and mushrooms are essentially just two different parts of fungi (truffles grow underground while mushrooms grow above ground), they each have different regulations in the Netherlands that companies like retail startup PharmaDrug are using to their advantage.

Drug Delivery Methods

[Drug delivery methods for psychedelic therapies.]

Many of the companies in this segment have filed provisional patent applications for innovative drug delivery methods. These include hard-shell capsules, oral strips, and nasal sprays among others.

Industry Tech and Telemedicine

[Telehealth and software development.]

Some of the largest psychedelics companies are increasing their focus on digital therapeutics and are therefore carving out a new path for the industry.

As just one example, telehealth company Mindleap has created a platform that connects mental health professionals with patients seeking psychedelic-based therapy.

Nutraceuticals and Other CPGs

[Consumer packaged goods, such as functional mushrooms.]

Considering the growing awareness of psychedelics to treat both mental and physical ailments, the consumer packaged goods segment of psychedelics has massive potential. However, this is still in its early stages.

It is therefore unsurprising to find many psychedelics companies dabbling in the functional mushroom market as an additional source of revenue.

IP and Patents

[Companies building psychedelic patent portfolios.]

Patent applications are ripe in the emerging psychedelics industry, especially in the biotech arena.

Although the concept of patenting psychedelics is widely debated, companies operating in the psychedelics industry are using them as a distinct competitive advantage, while advancing innovation in the space at the same time.

R&D and Clinical Trials

[Research and development and/or clinical trials involving psychedelics.]

While there are too many companies shepherding drug candidates through the clinical trials process to mention, there are over a dozen companies currently in Phase 2.

Tryp Therapeutics for example expects to initiate at least two Phase 2a clinical trials in 2021, with others planning for 2022. The company can then apply for drug approval once Phase 3 trials have been completed.

Tryp Therapeutics: Pioneers in Psychedelic Medicine

Tryp Therapeutics is a pharmaceutical company focused on developing clinical stage compounds for diseases with high unmet medical needs.

By harnessing the power of psilocybin, Tryp Therapeutics is going beyond mental health to treat a wide range of chronic pain indications, such as fibromyalgia, phantom limb pain, complex regional pain syndrome, and eating disorders.

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Ocean Economy: The Next Wave of Sustainable Innovation

This graphic explores how the $1.5 trillion ocean economy can help fight against some of the toughest challenges facing the world today.

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Ocean Economy: The Next Wave of Sustainable Innovation

Roughly 21–37% of total greenhouse gas (GHG) emissions are attributable to our current food system, which includes conventional agriculture and land use according to the latest IPCC report.

With the global population rising and more mouths to feed, now is the time to reconsider how we can tap into our global resources to build a more sustainable food system.

This infographic from Billy Goat Brands (CSE: GOAT) (“GOAT”) explores how the ocean economy—also referred to as the blue economy—plays a vital role in our fight against climate change and other environmental challenges facing the world today.

What is the Ocean Economy?

The ocean economy is described as the sustainable use of the ocean and its resources for economic development and ocean ecosystem health.

The global economic output of the ocean economy is $1.5 trillion each year. Here is an example of some of the activities and sectors that make up the ocean economy today:

ActivityRelated Sectors
Harvesting of living marine resourcesFisheries
Aquaculture
Harvesting of non-living marine resources 
Marine biology
Mining
Oil & Gas
Transport and trade
Tourism
Maritime transport
Shipping and shipbuilding
Coastal development
Renewable energy
Renewables (wind, wave, tidal energy)
Indirect economic activities
Carbon sequestration
Coastal protection
Waste disposal
Biodiversity

Financing ocean-related economic activities will ensure the future sustainability of this vital resource, and help combat threats that pose a risk to humanity, such as overfishing, pollution, and habitat destruction.

However, some experts say that there is insufficient private and public investment in sustainable ocean economy activities.

The Investment Opportunity

Investors have a unique opportunity to drive change through companies innovating in the ocean economy and be part of the solution.

  • The ocean could provide six times more food than it does today.
  • Seafood continues to be the fastest growing sector by 2030 with only 60% of fish available for consumption.
  • The ocean economy provides a smaller carbon footprint compared to conventional agriculture.

The potential for economic growth will only continue to grow, presenting investors and institutions with a chance to add value at this crucial stage of development while making a real and tangible impact.

In fact, investing $1 in key ocean activities can yield at least $5 in global benefits—a number that will continue to rise over the next 30 years according to a World Resources Institute report.

The report also states that investing between $2 trillion and $3.7 trillion globally across four crucial areas could generate between $8.2 trillion and $22.8 trillion in returns by 2050. These four areas are:

  1. Restoring mangrove habitats
  2. Scaling up offshore wind production
  3. Decarbonizing international shipping
  4. Increasing the production of sustainably sourced ocean-based proteins

An Ocean of Possibilities on the Horizon

Plant-based alternatives will play an important role in alleviating the pressure on ocean resources, and technological innovation has been pivotal in creating imitation products for the consumer market.

GOAT provides diversified exposure to expansion-stage companies that contribute to the ocean economy through innovative food technologies, functional foods and plant-based alternatives.

“We believe that plant-based seafood alternatives should be available for everyone, everywhere. That’s why we spent years creating a seamless experience that’s nearly indistinguishable from their animal-based counterparts.”
—Mike Woodruff, CEO Sophie’s Kitchen

Sophie’s Kitchen is one of GOAT’s investee companies and a leading California-based manufacturer and distributor of disruptive plant-based seafood alternatives.

Go to billygoatbrands.com to learn more about investing in the ocean economy today.

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Impact Investing: Building a Better World

While investors often focus solely on returns, impact investing introduces a way to also tackle global environmental and social problems.

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Typically, an investor’s main objective revolves around building wealth and then turning that wealth into an income generator. As a result, financial returns are accepted as the default performance metric.

But what if investing could also address the world’s most pressing social and environmental problems?

More Than Investing

This infographic from BlackRock introduces the concept of impact investing and explains why it can be a force for good.

impact

BlackRock Impact Investing

What Does Positive Impact Look Like?

Impact investing is a sustainable investing approach that combines the intention to generate positive returns with positive, measurable social and environmental outcomes.

To understand what these outcomes actually look like, here are some highlights from the companies that the BlackRock Impact Team invests in.

  • 102,000 GWh of renewable energy generated
  • 11 million metric tons of food waste mitigated
  • 114 million individuals empowered with access to financial services
  • 99 million people given access to clean drinking water
  • 600,000 families given access to affordable housing
  • 1.8 billion patients given access to affordable healthcare

These outcomes were generated in 2020, and help to make our world a better place.

The Three Pillars of Additionality

For impact investing to be an effective strategy, investors must be able to accurately measure the positive outcomes their capital is helping to create. A company may claim to be aligned with the UN Sustainable Development Goals (SDGs), but its actions may not be making a real world difference.

“Alignment to the SDGs is not enough to qualify as impact; we require that companies advance the SDGs by providing a solution that is additional, thereby creating genuine impact.”
-Quyen Tran, Director of Impact Investing at BlackRock

Below is an overview of the three pillars of additionality that BlackRock uses to measure impact. In this context, additionality means an outcome would not have occurred without the company’s contribution.

1. Additionality From the Investee (the company)

A company provides additionality if its products and services address a need that is unlikely to be fulfilled by others. The primary sources of company additionality are:

  • The application of leading technologies
  • The deployment of innovative business models
  • The delivery of products and services to underserved populations

Helping underserved populations is a powerful way to create impact. In 2017, for example, it was estimated that 1.7 billion adults did not have a bank account.

2. Additionality From the Investor

Investors can also provide additionality by empowering businesses to create positive impact. This can be done through five mechanisms:

  • Invest with a long-term ownership mindset
  • Engage with companies to help enhance their impact outcomes
  • Invest capital when an impact company needs to raise more capital
  • Bring much-needed visibility to undervalued impact companies
  • Create a better marketplace for impact companies looking to go public

The effects of these mechanisms are already being seen worldwide, especially as awareness of environmental, social, and governance (ESG) factors rises. According to a 2020 report by KPMG, 80% of companies now publish sustainability reports.

3. Additionality From the Asset Class

Even with the help of private investments, the world faces a multi-trillion-dollar shortfall in its quest to meet the UN SDGs by 2030. Public equities have the ability to shrink this gap by moving capital towards enterprises that are solving the world’s greatest challenges.

MarketValue
Private market impact investing$0.5T
Private markets$5.3T
Public equities$93.0T

Source: McKinsey & Co (2019), BlackRock (2020)

At $93 trillion in total value, public equities are roughly 20 times larger than private markets.

Building a Better World

Solving today’s greatest challenges often requires innovative solutions. Consider the fact that many regions suffer from a lack of doctors.

RegionDensity of Physicians
Europe1 for every 293 people
Americas1 for every 417 people
Southeast Asia1 for every 1,239 people
Africa1 for every 3,324 people

Source: World Health Organization (2021)

An impact investing strategy will seek out companies whose products or services can help to alleviate this shortage. For example, the BlackRock Impact Team has identified a medical software company whose platform lowers administrative costs and increases productivity.

Cybersecurity is another area where investors can help create positive change—according to McAfee, cybercrime has become a $1 trillion drag on the global economy.

This risk disproportionately affects small and mid-sized enterprises (SMEs) because they have limited resources to protect themselves. Cybersecurity companies that specialize in servicing SMEs can help protect this important part of the economy.

The Time is Now

Impact investing is not limited to a single theme. Around the world, various social and environmental issues are capturing the attention of governments and society. Ultimately, what’s needed are innovative solutions.

“If your savings can earn a strong return invested in companies that are doing good for the world, why would you invest any other way?”
—Eric Rice, Head of Active Equities Impact Investing at BlackRock

By directing capital to the right companies, investors have the potential to generate financial return while building a better world.

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