The psychedelic stock sector is beginning to boom, with legalization efforts initiated worldwide for a variety of different alternative medical treatments from this category. Investors want to know more about the psychedelic stock investment opportunities from industry-leading experts.
Today, we chatted with Derek Du Chesne and Dr. Sam Zand from Better U. Better U is preparing to open integrative psychedelic therapy clinics in countries where psilocybin is already legal while also expanding into the psilocybin space in the United States as soon as it is legal to.
Schaeffer's: What are some obstacles you see in the next five years for the psychedelics industry? How do you think the industry can best overcome these obstacles?
Derek Du Chesne: A few of the key obstacles that the psychedelics industry is facing are the professional and public acceptance of illegal drugs, lack of medical expertise, ethical and legal issues with psychedelic harm reduction, overinflated valuations that are impossible to justify, and well, with any emerging market you're going to attract brilliant minds as well as the riff raff.
The public has been educated with propaganda from our government ever since the failed war on drugs (1971) that halted the research and declared that these drugs have zero medical value. The majority of the world soon followed suit. Even patients that are being treated for depression with an FDA-approved drug that's a derivative of ketamine (Spravato) fear how their friends/family will react to them starting (legal) psychedelic therapy. We must address and deconstruct the stigma around psychedelics. It's going to take massive educational campaigns to shift public perception/stigma against these drugs.
The medical community regularly prescribes adderall and xanax with entire communities having been destroyed due to the opioid crisis, but even the talk of safe and medically effective psychedelic treatment is still largely taboo. The majority of the medical community are not being educated on the medical benefits of these substances or how to properly treat patients. Fortunately, that is rapidly changing.
Like any other medical treatment, psychedelic therapy can have some risk. People may have difficulty accessing psychedelic treatments which can lead to self-medicating with illicit and impure drugs. People that are struggling with mental health issues are researching online and seeing the medical benefits of – whether MDMA, ketamine, or magic mushrooms – and many seek out these drugs illegally. This inherently presents risk since these substances and the environments in which they consume them aren't monitored or regulated.
It is dangerous using these substances without medical guidance and proper monitoring. There is a risk of being arrested or not having knowledge of the ingredients (potentially being laced or cut with fentanyl for example). Patients in psychedelic therapy are intensely vulnerable. Those already struggling with mental health issues must be gently guided. There have even been reports of sexual abuse with MDMA-assisted therapy.
It is critical that psychedelic clinicians, therapists, and retreats incorporate a harm reduction approach into their practice. It is also critical that people who could benefit from these substances get safe access and proper medical attention.
Dr. Sam Zand: The psychedelic medical industry is brand new and needs expert medical guidance. For many medical professionals, there is a stigma to overcome since it has only been 2 years since the first pseudo-psychedelic esketamine gained FDA approval. Other than ancient wisdom and independently funded private research, there is no formal curriculum on psychedelic medicine or integration therapy. Psychedelics have not been taught in medical schools or psychiatry residencies.
We will overcome these obstacles with collaboration of industry experts to provide safety and training in this new field of medicine. Better U has partnered with clinics doing research in safety and efficacy of at-home ketamine. The numbers so far are overwhelmingly positive. We’ve seen over a 90% response rate and so far only less than 3% of participants have dropped out due to minor side effects or inefficacy. As the industry continues to strengthen these research findings, the general public will gain more comfort.
Schaeffer's: How might the psychedelics industry emergence mirror the cannabis industry emergence?
Derek Du Chesne: We are seeing some similarities in this emerging market. First, it’s the legality of these substances. Cannabis is a schedule 1 drug, as well as several psychedelics that are currently in clinical trials.
Ketamine, alternatively, is on the World Health Organizations (WHO) list of essential medicines and is used globally in hospitals daily as an anesthetic, and as of recently being prescribed for mental health issues. We’re seeing major movements with M&A in psychedelics. In cannabis, companies were being acquired left and right for massive multiples with minimal numbers or justification. Money started pouring into the cannabis industry, and with every success story, there are dozens of failed businesses.
A lot of the early companies had either strong infrastructure with minimal leadership, or strong leadership but lacked infrastructure. In order to succeed, you need both. There was also a lot of “smoke and mirrors” early on in the cannabis industry, with companies misrepresenting their capabilities, inflating numbers, and misusing investors’ funds (ie. Ignite). Fortunately, a lot of that has ended and investors have become more diligent. Let’s hope that the psychedelics industry does not follow the same path.
Cannabis is just one plant, while psychedelics encompass dozens of different molecules, plants, and substances. The psychedelics industry has more in common with the diverse biotech industry than the cannabis industry, where most companies focused on one thing. The potential is untapped. We will see FDA-approved forms of magic mushrooms, LSD, MDMA, ibogaine, ketamine iterations, and possibly DMT formulations.
Schaeffer's: Conversely, what are some of the potential paradigm shifts that can propel the industry forward? How will industry leaders capitalize on the opportunities?
Dr. Sam Zand: We are in a mental health crisis, ripe for reform and innovation. The standard of care in medicine is outdated as it dates back over 100 years. Our current medical model forces us to diagnose an illness and then try to improve the symptoms. Psychedelics have shown us the power of our body and mind to heal itself. When we can remove the mental obstacles and toxins, our brain regenerates and brings us to a state of healing. The paradigm shift brings us to an understanding of what is contributing to our perceived ailments, addressing them holistically, and accelerating repair and growth neurologically and biologically. - Dr. Sam Zand
Derek Du Chesne: Education, for the public and medical communities is key for this industry to grow. The paradigm shift is happening, the psychedelic revolution is here. As the weight of the covid pandemic and restrictions are being lifted, the long-term psychological effects have been magnified. Every 40 seconds, someone commits suicide (according to WHO data). Depression, alcoholism, anxiety, and overdoses are at an all-time high. People are suffering and legacy treatments have proven to be ineffective for a lot of people. It is time for change and we are grateful to be surrounded by so many incredible people in the psychedelics industry. Most of us have very personal experiences as to why we got into this business. There is so much opportunity - from supply chain, drug-development, psychedelic clinics, retreats, education and integration. There are so many remarkable people doing remarkable things to improve our mental health and make our world a better place.
Schaeffer's: What should a retail trader know about the psychedelics industry that isn’t readily covered by mainstream media? What should a retail investor look at before investing in a psychedelics company?
Derek Du Chesne: Stop buying stocks of companies just because you liked the press releases! Dive deeper, look at the TEAM, the numbers, the pipeline, the comps. If you’re investing in biotech, how likely is it that they have a shot of making it across the finish line with X drug? How well funded are they? Does their team have a track record of success? These new companies come with a high level of investment risk, with early trials showing promise but the business generating no revenues. For the clinics - look at their team, price points, scalability, and the numbers. What are patients saying online about them? What are they doing differently? For the funds - look at their investments and M&A strategies. Are they making smart moves or buying headlines? There are strong teams doing incredible things; after due diligence, you will find them.
Schaeffer's: From your perspective, what adjacent industries stand to benefit from the psychedelics industry’s continued emergence? What about sectors that could struggle?
Dr. Sam Zand: Number one is Big Pharma. Previously, ketamine has been high cost and these medications have been utilized by the peak performance and affluent demographics. Now, as the FDA starts to approve other psychedelics, they will be available for all those in need. Big pharm is an ally in our ability to bring these therapies to market.
Number two is Big Tech. Right now, psychedelic sessions are book-shelved by trained guides and the inward journey is enhanced with an eye mask and sound healing playlists. Apps are coming out to help integrate the experience. In the future, VR integration will be a huge part of the healing experience.
Derek Du Chesne: When you’re helping people improve their mental health, their performance improves. Psychedelics are a tool to improve behavioral changes. A vast range of industries stand to benefit from the emergence of psychedelics. We’re looking to take psychedelic medicine out of the shadows in a safe, effective, and legal way.
Schaeffer's: How closely aligned do you feel the psychedelics sector with the biotech sector?
Derek Du Chesne: The psychedelics industry is very aligned with biotech. Biotech is leading the charge with psychedelics. Drug development gearing for FDA approval with ketamine for depression and anxiety (Esketamine achieved FDA approval in 2019), MDMA for PTSD, psilocybin for depression and even weight loss, ibogaine for opioid addiction, and a derivative of LSD for Alzheimer’s and dementia. The clinical trials are showing strong results and the future is incredibly exciting for psychedelic medicine.
Schaeffer's: Finally, please tell us more about Better U and the mission behind the opening integrative psychedelic therapy clinics worldwide.
Dr. Sam Zand: We are excited about the ability for psychedelics to enhance self healing. Through different psychedelic therapies, we can enhance self-growth, self-love, and self-transcendence. Today, the work is being done at home and in clinic via ketamine therapy. In the next few years, we will provide in clinic therapies with FDA approved MDMA, psilocybin, and LSD formulations. Our goal is to cement the expert medical delivery and integration of psychedelics for the long term future of this brand new medical industry. We are here to increase access and education around psychedelic medicine by giving people the tools to improve mental health by enhancing brain function and performance through scientifically proven mental health treatments.
Derek Du Chesne: We are here to help. It’s okay to not be okay. I was suffering from treatment-resistant depression and nothing would help to shake the negative thought cycles. Ketamine therapy saved me. After this transformational experience, I found myself again. After spending time at Stanford’s Psychedelic Research Institute and Depression clinics, I became enamored with the research and applications of psychedelics for mental health. This led me to finding Dr. Sam Zand (Johns Hopkins University), a leader in psychiatric and psychedelic medicine. Together, we created something thoughtful and scalable to help people who are suffering. I’m not a doctor, but as a previous patient and an entrepreneur in emerging markets, I am driven to transform mental health with psychedelic medicine. Better U has built the brand, delivery systems, on-demand therapeutic guidance, and scalable provider network for the forthcoming mental healthcare and psychedelic medicine revolution.
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MORE ABOUT DEREK DU CHESNE
As the CEO and co-founder of Better U, Derek Du Chesne helps transform lives with safe, effective, and affordable at-home psychedelic therapy. After utilizing ketamine therapy to treat depression in 2019, Du Chesne was inspired him to collaborate with leaders from Stanford’s Psychedelic Science Center and Depression Research Clinic to explore ways to increase accessibility to psychedelic medicine. After discovering how psychedelics can treat a multitude of mental health challenges, making psychedelic medicine more accessible became his mission. In 2021, Derek partnered with Dr. Sam Zand, a leader in psychiatric and psychedelic medicine, to create Better U. Du Chesne was a leader in the cannabis sector, responsible for the sale of over $100 million in cannabis-derived products from 2018-2020. Derek has served as chief executive officer, chief commercial officer, and chief growth officer for leading brands and has a proven track record in the development and execution of marketing strategies, building commercialization infrastructure, increasing revenue, managing internal sales teams, and overseeing launches, expansions, and product development.
MORE ABOUT DR. SAM ZAND
As a practicing psychiatrist and the Chief Medical Officer of Better U, Dr. Sam Zand utilizes his expertise in neuroplasticity to help patients address the root cause of their problems and establish new ways of thinking. After initial psychedelic medicine research at Johns Hopkins University, Dr. Zand began treating patients clinically with ketamine in 2019. He now teaches psychedelic medicine rotations to psychiatry residents and medical students and is an advocate and spokesperson for the FDA-approved esketamine, Spravato. Zand is trained in general psychiatry, addiction recovery, and psychotherapy, and has a passion for psychedelic therapy, crisis intervention, relationship counseling, and integrated spiritual therapy. Dr. Zand is passionate about increasing education to end the stigma that surrounds mental health topics, advancing the integration of psychiatry and spirituality, and making clinically proven, innovative new therapies more accessible for all.
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