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Psychedelic Clinics Are A Major Vertical That Investors Need To Be Watching

Feb 4, 2021 • 7:22 AM EST
5 MIN READ  •  By Michael Berger
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The clinic opportunity is an exciting vertical of the psychedelic industry and is a market that our readers need to be aware of.

Last year, the psychedelic clinic market recorded significant advancements, and this is a trend that is expected to continue. We believe the negative mental health effects that are associated with COVID pandemic will fuel the growth of the psychedelic clinic sector and have been focused on identifying leading operators in the space.

Today, we highlighted 3 companies that are levered to the psychedelic clinic market and believe these operators are well positioned to capitalize on the current trend. Over the next year, we expect these operators to record strong growth and believe that our reader should be following these businesses.

Wake Network: A Pre-IPO Opportunity to be Aware of

Wake Network is privately held company that is focused on advancing fungi and plant-based medicine by leveraging clinical research, wellness professionals, and technology. The company plans to complete a go-public transaction in the near future, and we wanted to provide an update on the opportunity.

Wake Network represents a differentiated growth opportunity, and we are favorable on the initiatives it has focused on. The company has developed a regenerative feedback loop that allows it to research, monitor and incorporate results from clinical studies to personalize medicine to reduce the level of ambiguous results from traditional medicine.

One of the reasons we are excited about Wake Network is related to the structure of the business. The company operates an integrated business model that provides it with multiple revenue streams, and we are bullish on the number of synergies that can found between the divisions.

As it relates to the psychedelic clinic vertical, Wake Network has been nothing short of an execution story and has a clinical immersion platform in Jamaica, the Netherlands, California, the British Virgin Islands, and Brazil.

Last year, Wake Clinics opened a 3,000-acre mountain retreat, private beach and pavilion in Jamaica. The facility offers psilocybin-based therapy where licensed professionals assess patients and track biofeedback. Therapists who work at the clinic provide ongoing monitoring to ensure the full integration of the healing process.

We consider Wake Network to be a multi-faceted opportunity that has significant potential catalysts for growth.  Over the next year, we expect the company to record notable advancements related to the assets in Jamaica and with its clinics. This is an opportunity that we will be putting on our radar and one that our readers should be following.

Numinus: A Multi-Faceted Growth Story that is Focused on Clinics

Numinus Wellness Inc. (TSXV: NUMI) is another promising play on the psychedelic clinic market and we are favorable on the structure of the business. Like Wake Network, we believe the company will be able to find significant synergies between its divisions and are of the opinion that it has near and long-term growth catalysts.

Through Numinus Health, the company has a consumer-facing division that is centered around the delivery of psychedelic-assisted psychotherapies. Numinus Health already has one clinic that is prototyping delivery systems for efficiency and profitability. We will monitor how the division is granted the licenses that are needed to execute on this vertical and expect the granting of such licenses to serve as a substantial catalyst for growth.

During the last quarter, Numinus has completed private placement financings and has strengthened its balance sheet. We believe the stronger cash position will improve the risk-reward profile that is associated with it.

One of the reasons we are excited about Numinus is related to the strategic partnerships that it has formed. We believe the company is flying under the radar and will be following how the management team is able to continue to drive the story forward.

Revitalist: A Leading Ketamine Clinic Operator

Revitalist represents an attractive play on the ketamine clinic market and is an operator that our readers should be aware of.  The company utilizes cutting edge, evidence-based treatments that are on the forefront of mental health and pain conditions.

The company is led by a management team that is comprised of operators and marketers that have more than 30 years of combined experience in ketamine administration. We believe the strength and the background of the management team is a key pillar of the Revitalist story and are favorable on this aspect of the story.

In early 2018, Revitalist’s flagship clinic commenced operations and the management team expects to have 20 clinics open by the end of the year. By 2022, Revitalist expects to open 120 clinics and we will monitor how the management team is able to execute on this.

From an economics standpoint, Revitalist is focused on an attractive market and we are favorable on the potential value that can be generated by each clinic. The cost to open a clinic is less than $500,000 and we are favorable on the low-cost nature associated with each one. If another operator tried to enter this market, the cost associated with opening clinics are much higher and we attribute the low-cost nature of Revitalist’s platform to be related to the experience that is associated with the management team.

Later this year, we expect Rivatalist to complete a go public transaction and will continue to closely monitor the opportunity. From a differentiation and an economics standpoint, we believe the company represents an attractive play on the ketamine clinic market and this is an opportunity our readers should be aware of.

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Michael Berger

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