Today we take a closer look at New Wave Holdings, a company actively researching psychedelic compounds with the aim of creating an IP portfolio focused on psilocybin, LSD, MDMA, and ketamine-derived treatments to target neuropsychiatric diseases. Furthermore, New Wave is also creating a catalogue of consumer products based on functional mushrooms.
Headquartered in Toronto, New Wave trades on the Canadian Securities Exchange under the ticker “SPOR”. Its stock also trades on the Frankfurt Stock Exchange under the ticker “0XM2” as well as the U.S. OTC market under “TRMND”. As of March 5th, 2021, the company had a market capitalization of $9.9mn.
New Wave Holdings Business Segments
New Wave’s operations can be broken down into three distinct business units. The company is hoping to establish a leadership position across these markets.
New Wave Recreational: The global legal market for recreational psilocybin use is currently estimated to be worth between $8-$19bn. Psilocybin is legal for recreational use in countries such as Jamaica, Brazil, and the Netherlands. In other markets, we are now witnessing a psychedelic renaissance of sorts, with strong indications that other countries will slowly decriminalize and then legalize the use of recreational psychedelics. We are already seeing this play out in scores of jurisdictions in the U.S. In November 2020, Oregon became the first state to legalize the use of magic mushrooms.
Owning cultivation and processing facilities is a vital part of New Wave’s strategy. The company owns two farms (total of 22 acres) for mushroom cultivation in Jamaica, which include on-site processing facilities producing truffles, mushrooms, edibles, capsules, grow kits, and neurobotanicals. In this regard, New Wave is actively undertaking new product development programs and acquiring/constructing additional cultivation facilities. A present, its growth strategy is focused on international exports to Brazil and the Netherlands, which are currently the two largest legal recreational markets.
New Wave Natural: Through its “Altilis Beauty” brand, New Wave has developed an all-natural product line produced from the tropical breadfruit flower. Its products include facial cleansers, serums, gel masks, moisturizers, body butter and lip balms. Altilis also owns the patents to create the flower extract which provides the bioactive benefits of the plant.
The brand was launched in September 2019 and to date, has sold goods worth $200K in domestic and international markets, through its direct-to-consumer web portal AltilisBeauty.com.
Through its “Anahit Natural Health” brand, New Wave is also looking to develop a product portfolio that includes healthcare products comprised of legal functioning mushrooms. The company’s product SKU’s will include liquid cordyceps, concentrated mushroom powder, teas, chocolates, syrups, elixirs, cold beverages, and nasal sprays. All the formulations for these products are unique and are being developed in-house by New Wave.
Apart from developing a mycological-based consumer product line, New Wave is also exploring the possibility of setting up Therapeutic Retreat Centres.
New Wave Mental Health: The global market for mental health and neurological disorders is expected to reach $129bn by 2025. It is estimated that in the U.S., 40 million adults are affected by anxiety, 20 million from substance abuse and 17 million from major depression. With over $40bn spent on rehabilitation programs, these conditions are having a huge negative effect on the U.S. economy.
There is ample research reinforcing the idea that psychedelic compounds can offer more effective mental health treatment options than the pharmaceutical products currently in use. Leading global institutions such as the John Hopkins Institute and the Multidisciplinary Association for Psychedelic Studies (MAPS) have indicated that psilocybin-assisted therapy could be a revolutionary treatment for substance and alcohol addiction disorders, depression, and even post-traumatic stress disorder (PTSD). The FDA has even granted breakthrough therapy status to further the study of psilocybin and ketamine remedies to treat these conditions.
New Wave is building a scientific advisory board to expedite the development of its psychedelic medical research portfolio. This includes developing an IP portfolio focused on psilocybin, LSD, MDMA, and ketamine derived treatments for neuropsychiatric diseases.
Acquisition of Way of Will: In December 2020, New Wave acquired a 100% interest in Way of Will, a Toronto based aromatherapeutic essential oil-based wellness company. The company distributes its products through wholesale, retail, and e-commerce. It had an exclusivity agreement with Whole Foods which recently expired. The company is setting its sights on expanding their presence in the food/drug/mass (FDM) market in the U.S. with their new partnership with United Natural Foods.
Going forward, New Wave will continue to evaluate additional investment opportunities in the mycology/mushroom space while also exploring collaboration opportunities on various research studies. The outlook for New Wave looks bright to say the least. The company has a holistic mycological portfolio which will continue to garner market share over the coming years.
Furthermore, the company is being run by an exceptionally talented leadership team that has its sights on expanding all three business units. With growing acceptance and legalization, analysts predict that global market opportunities for mycologicals, which includes psychedelic mushrooms, could reach $100bn by 2024 and New Wave is well positioned to capitalize on this trend.
Former Analyst at Citi's Investment Banking division where I was responsible for covering a variety of sectors including healthcare, consumer, technology, aviation & logistics. My interest lies in profiling and evaluating companies that are operating in new-age industries with huge potential. The psychedelics market presents a tremendous opportunity and is increasingly garnering the interest of investors. There is sufficient literature investigating the therapeutic effects of psychedelics in the treatment of a variety of mental illnesses. I'm here to help you navigate through the Canadian listed players operating in this space. I will look to highlight the strengths of different players and differentiation in R&D, which is crucial for successfully driving the drug development process.