Investing in magic mushrooms? Lauderdale investor is betting they’re the next big pharma play
Could magic mushrooms be the next blockbuster opportunity in once-taboo drug investment?
Dustin Robinson, a Fort Lauderdale-based attorney specializing in drug investments and regulation, thinks so.
Better known as Mr. Cannibis Law, Robinson announced Tuesday the launch of Florida-based Iter Investments, a firm that will deploy capital into the emerging psychedelics treatment space.
Robinson says investing in psychedelics is not about expanding recreational use. Drugs like MDMA and psilocybin are increasingly seen as viable treatments for acute mental health issues.
Robinson declined to say how much he planned to invest — but whatever the amount, the return is likely to be substantial.
The U.S. psychedelic drugs market is forecast to grow at least 16.3% annually through 2027 to at least $7 billion, driven by the increasing prevalence of depression and similar mental disorders in society, according to Data Bridge Market Research. One psychedelics biotech company, London-based Compass Pathways, went public on the NASDAQ exchange in September and is already worth more than $1.2 billion. That company, alongside another based in Germany, both received investments from famed venture capitalist Peter Thiel.
“[They’re] great virtue is to take mental illness as seriously as we should have been taking all illness all along,” said Thiel, who co-founded Palantir and PayPal, in a statement shared with CNBC in November of the Germany company, ATAI. “The company’s most valuable asset is its sense of urgency.”
Robinson said the U.S. Food and Drug Administration has already approved ketamine for off-label use on depression. It is also in the process of conducting trials on prescription uses for MDMA, better known as ecstasy; and psilocybin, the active ingredient in what are commonly known as magic mushrooms.
No, Robinson doesn’t recommend popping either one of those to alleviate your problems.
“The only place where this is similar [to cannabis] is that they are both Schedule 1 drugs [according to the Drug Enforcement Administration], so they get lumped together,” he said.
Robinson’s thesis is threefold: First, the Western world has an acute mental health crisis. Second, many if not a majority of existing treatments are of limited efficacy at best.
“There hasn’t been much useful drug development in this space in the past three decades,” Robinson said.
Third, new treatments are being developed around psychedelics. But in a further departure from cannabis, these will not be administered at a CVS, let alone a dispensary. Instead, the treatments will entail what Robinson called an entire new “infrastructure” of therapy centers.
“The way these compounds are being approved [by the FDA], they must be administered at a facility,” he said. “So there is going to be a complete paradigm shift.”
And that is where the market opportunity lies.
“So we’re investing in the drug companies, and their suppliers. But we’re also investing in the clinics,” he said.
In addition to Robinson, Iter’s advisory board includes five South Florida-based doctors or executives in the space:
- Dr. Scott Fisher, Psychiatric Lead for Iter Investments, is a psychotherapist, psychiatrist, and the lead facilitator at Miami-based Segal Clinic in the Usona FDA Phase 2 clinical trial assessing effectiveness of psilocybin for major depressive disorder.
- Dr. Michelle Weiner, Clinical Lead for Iter Investments, runs a clinical practice that includes psychedelic-assisted therapy through ketamine.
- Attorney Edgar Asebey, Esq., FDA Lead for Iter Investments, has over two decades of experience in federal regulation of pharmaceuticals and biotechnology.
- Andrew Hall, Scientific Lead for Iter Investments, has a Ph.D. in Natural Products Chemistry and Pharmacognosy and serves as Chief Science Officer of Green Scientific Labs, a cannabis testing facility in Davie.
- Matthew Savarick, a mental and behavioral health executive, is an expert in coaching high-performing individuals and teams to reach even higher levels of success.
“These compounds are going to drastically change the mental health of society,” Robinson said. “Anyone who thinks this is some kind of back-door play is vastly misunderstanding the situation.”
