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Canada has licensed a startup to export psychedelics to Australia for patient use, the latest milestone in a contest to supply the potential growth of medical psychedelic drugs.
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Canada’s Health Department awarded a drug establishment licence to Optimi Health Corp., a spokeswoman for the company said, allowing it to ship pills containing the magic-mushroom extract psilocybin and MDMA — controlled and otherwise illegal substances — to a provider in Australia.
The small Vancouver-based company hopes the certificate will help pave the way to an expanded market for psychedelic drugs as pharmaceuticals while giving it an early mover advantage.
Seven companies have legally exported psilocybin, MDMA or both from the country so far, all for clinical trial purposes, a spokeswoman for Canada’s Health Department said. She wasn’t able to say if any has ever been exported for regular patient use before; she declined to name the seven companies, citing security reasons.
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The milestone puts Optimi among a small club of legal, international suppliers of psychedelic drugs, according to chairman John James “JJ” Wilson, its co-founder and the son of billionaire Lululemon Athletica Inc. founder Chip Wilson.
Optimi’s vision is “to be the largest scalable quality manufacturer made available globally of psilocybin and MDMA,” JJ Wilson said in an interview. “The world is taking this more seriously as an alternative to traditional pharmaceuticals to treat these mental-health disorders.”
The market today is clinical rather than recreational, Wilson said, downplaying parallels to the legalization of cannabis in Canada and many U.S. states.
Optimi’s bet is that even though magic mushrooms are naturally occurring, demand for a pharmaceutical-grade version of the substance will be robust and the company will have the credentials and scale to supply it.
As it seeks to carve out this niche, refine processes and strike early supply deals, it’s losing more than $1 million per quarter and regularly raising funds, filings show. Chip Wilson, who sits on its advisory board, acquired shares with options worth as much as $3.3 million in late 2022 and since then the company has closed small private placements.
To grow, test, and extract its trippy crop, Optimi has set up 20,000 square feet of facilities in Princeton, B.C., a mining and lumber town with a population of about 3,000 in the mountains three hours’ drive east of Vancouver. The nondescript blue warehouses are set behind high security fences.
Visitors must show government ID, don protective clothing and pass through air jets to prevent contamination. Although warehoused mushroom strains have zany and obscene names like “Albino Penis Envy,” Optimi has built facilities to pass stringent manufacturing-quality tests set by authorities. Staff have to undergo background checks.
All this effort and investment is part of jostling to be in prime position for a possible psychedelic renaissance.
Although many jurisdictions have now relaxed rules around cannabis, the regular possession, sale and distribution of potent psychedelics remain illegal in Canada and the U.S. But attitudes are shifting and there’s increased talk of potential benefits in treating psychiatric conditions. Research has increased — and in some cities like Vancouver, rebellious entrepreneurs have even opened brick-and-mortar stores, which sell psychedelics with apparent impunity.
Optimi said it’s ready to step in first wherever MDMA and mushrooms become rescheduled and pointed to regulatory developments.
Last June, the U.S. Food and Drug Administration published its first draft guidance on psychedelic clinical trials, saying they showed “initial promise”. A month later, Australia opened a world-first pathway for authorized psychiatrists to access MDMA and psilocybin, saying they can be used for the treatment of post-traumatic stress disorder and treatment-resistant depression, respectively.
Outside advisers to the FDA are preparing to meet this week to weigh Lykos Therapeutics Inc.’s MDMA drug for post-traumatic stress disorder. A report from the agency scientists, posted Friday, focused on the difficulties of evaluating the drug and potential risks.
Still, untested business models and regulation in flux means that investment prospects are highly uncertain.
As with cannabis companies, psychedelic startups have gone through a shakeout. Optimi’s stock price is down 43% since its 2021 initial public offering. Others including Lucy Scientific Discovery Inc., Psyence Biomedical Ltd. and AWAKN Life Sciences Corp. have also seen their shares plummet since listing.
“In 2024, we’ll develop a capital strategy for how we want to go to the next phase,” Wilson said.
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