One of the most exciting trends of 2020 has been the emergence of the functional mushroom market. This vertical has been generating substantial traction over the last decade and this is a trend that is only getting more significant.
According to a report by Research and Markets, the global edible mushrooms market is expected to grow at a CAGR of 7.95% to US$62 billion by 2023, increasing from US$42 billion in 2018. According to the market intelligence firm Mordor Intelligence, the functional mushroom market is expected to grow from $5.8 million in 2018 by 6.4% per year through 2024.
Consumers across the globe have shown a preference for organic health foods and this has benefited companies levered to this vertical. Functional mushrooms have been a bright spot in what has been a rapidly growing market and we want to highlight 5 companies that are levered to this vertical.
Rritual: An Industry Leader in the Making
Last month, we learned about an early stage company that was making waves in the functional mushroom market. The company, Rritual is working to bring the first premium brand of mushroom and adapogenic elixirs to market. The company has secured strategic relationships to help bring the product line to market and we are favorable on the verticals that it is levered to.
One of the reasons we are excited about Rritual is due to the types of products it plans to bring to market. The products include an immune booster that is derived from chaga, a brain booster that is derived from lion’s mane, a stress support product that is derived from reishi.
Another reason we are excited about Rritual is due to the global sales and distribution strategy that it has in place. The company plans to have a multi-stage product rollout and will target locations where customers are located. We are favorable on this approach as the company will be able to target a certain subset of consumers.
From an e-commerce standpoint, Rritual plans to work with some of the world’s largest online retailers and we are bullish on the growth prospects associated with this strategy. The company also plans to sell products out of brick and mortar stores and expects to see the product gain traction in both channels.
Rritual has been highly focused on the human capital side of the functional mushroom market and this is an important aspect of the story. The company is led by a management team that has diverse expertise and we are favorable on the types of individuals who make up the team.
Rritual is in the early stages of a major growth cycle and is an opportunity that we will be closely following. Later this year, the company plans to complete a go-public transaction and we will monitor how the management team is able to execute on this.
Cybin: Executing on Several High-Growth Verticals
Cybin is a life sciences company that is focused on the pharmaceutical development of psychedelic products as well as the functional mushroom market. The functional mushroom brand that is owned by the business is called Journey, which is a comprehensive line of functional mushroom products that contain adaptogens to support brain and body health.
Over the next year, we expect Cybin to record impressive growth and for Journey to prove to be a major value driver for the business. Through the sale of nutraceutical products, Cybin will be able to support the growth and advancement of other verticals of the business.
We believe that Cybin is focused on several high-growth verticals and are favorable on how it has been able to differentiate itself from other functional mushroom and psychedelic companies. Going forward, we expect Cybin to report significant developments as it relates to its intellectual property (IP) strategy and find this to be an attractive aspect of the story.
One of the reasons we are excited about Cybin is due to the strength of the management team. The company is led by a management team that is comprised of industry veterans who have vast experience in the psychedelic, pharmaceutical, and nutraceutical sectors. We are favorable on the track record that the management team has when it comes to bringing pharmaceutical products to market and this is an opportunity to be aware of.
New Wave Holdings: A Multi-Faceted Growth Opportunity
New Wave Holdings Corp. (CSE: SPOR (OTC:TRMND) is an opportunity that came across our radar and is one that we are excited about. The company represents a multi-faceted growth opportunity and has been laser focused on the burgeoning psychedelic. In the psychedelic sector, New Wave will focus on active psychedelic compounds, functional mushroom product lines, and will develop an intellectual property (IP) portfolio that is focused on psilocybin, LSD, MDMA, and ketamine derived treatments for neuropsychiatric disorders.
Last month, New Wave and Anahit Therapeutics announced a manufacturing agreement with Kirkman, a FDA and Good Manufacturing Practice (GMP) certified manufacturer, to launch two proprietary functional mushroom products. The GMP certification means that Kirkman maintains the highest quality and safety standards for the products it produces, and we expect this to play an important role with how the products gain traction.
Kirkman has been a household name for decades and was founded in 1949. The company is a leading manufacturer of nutritional supplements for individuals with dietary sensitivities and restrictions. We are bullish on the companys relationship with New Wave due to the credibility that Kirkman has and expect this relationship to play an important role in the success of the functional mushroom product line.
In collaboration with Kirkman, New Wave is launching a proprietary, five-mushroom blend supplement under its Anahit Therapeutics brand. The blend will contain reishi, cordyceps, lion’s mane, oyster and shiitake mushrooms. The products will be available in both powder and capsule form and we are favorable on the diversity of the product line.
Last month, New Wave commenced trading on the Canadian Stock Exchange (CSE) and has been generating significant traction in the market. The shares have recently pulled back with the rest of the psychedelic sector and we believe that the decline has created a great opportunity for investors who are interested in the opportunity.
WAKE Network: Capitalizing on the Functional Mushroom Market
WAKE Network is an emerging opportunity that is focused on advancing fungi and plant-based medicine by leveraging clinical research, wellness professionals, and technology. The company represents a multi-faceted growth opportunity that is highly levered to the functional mushroom market and we are favorable on the structure of the business.
WAKE is laser focused on the development of a line of premium functional mushroom products. All of the functional mushrooms that produced by WAKE are organic and we are favorable on this aspect of the story. During the last decade, there has been a substantial increase in demand for organic products and we expect WAKE to benefit from this trend.
WAKE operates an integrated business model that provides it with multiple revenue streams, and we are bullish on the amount of synergies that can found between its divisions. We are favorable on the direction that the management is bringing the business and expect WAKE to be a leader in the functional mushroom market.
Psyched Wellness is Flying Under the Radar
Earlier this month, we conducted due diligence on Psyched Wellness after becoming aware of the opportunity. The health supplements company is in the early stages and is highly focused on the production and distribution of artisanal functional mushrooms and associated consumer packaged goods.
Over the next year, Psyched plans to develop and launch a line of mushroom-infused functional tinctures, teas and capsules. The products are designed to ease physical distress and help people sleep better. The company’s goal is to become a leading brand in the emerging functional food vertical, and we will monitor how the team is able to execute on this market.
Although Psyched Wellness has not been a big beneficiary of the increased awareness that is surrounding the functional mushroom market, we believe that it represents an acquisition target and is an opportunity to be aware of. The company is privately held, and we will monitor how the story continues to evolve.
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