The world of psychedelics is an interesting place, in which exists a potential addressable market of hundreds of billions, if not trillions, of dollars on a global basis. But for now, that potential is an arm’s length away. Psychedelics exist in a place where the majority of public companies have inflated market caps based mostly on the news that they are generating. In other words, there are very few organizations whose market cap is reflective of their actual, recent financial performance.
Actual marketplace value should not be determined by hype alone. Something that casual investors tend to learn the hard way, especially in new industries. But the idea of the ‘mush rush’ is a little bit different. For psychedelics, it is more so the case that a significant number of regulations and legal barriers present the hurdles, rather than the risk of corporate mismanagement. Therefore, current regulations have created an environment where there are very few channels that can consistently drive revenues.
So when there are so many restrictions on how a psychedelics-based company can generate revenue, what can the investing public look for in order to identify strong companies? It is important to seek out companies that are creating the most robust and stable baseline of product and service offerings for the near future.
Some psychedelics companies are focused on scientific research and intellectual property. Despite psychedelics being in the public domain, making it difficult to patent anything in this field). Others are focused on progressing and operating clinics and treating patients. Although the clinic approach offers the most immediate public, it is also one of the hardest ways to create a differentiated experience. Companies focused on this area of the industry have to be particularly diligent when it comes to the decisions they make and how they manage their public perception.
An approach that some companies have been taking is attempting to patent any and every clinical process under the sun, so to speak. These attempted patents include standard processes like hand-holding during treatments, playing quiet music, or having patients sit on comfortable furniture. Some organizations seem more interested in shutting out the competition rather than actually addressing mental health issues. While this approach may be a savvy business move, the public’s perception of this strategy is quite negative.
Clearly, ‘patent trolling’ is not the best way to build consumer confidence and generate revenue. What else can be done to represent value to the market? The simple answer is to assemble the right strategic ecosystem. Compliment that by creating a simple and understandable action plan. Embrace complementary technologies, and deploy an array of operational tactics. These are the simple drivers for a strong, clinic-focused psychedelics business that can form a strong and stable client base.
Take Ketamine One (NEO: MEDI) for example, which is a Canadian psychedelics company with three core areas of focus. Their primary focus is on expanding its portfolio of medical clinics across North America. At the same time, they are performing contract research and incorporating digital therapeutics as key parts of its strategy. Ketamine One does not attempt to generate hype about everything it does (a la the cannabis industry). Rather, they are quietly building a strong, integrated business model that may just offer the best chance for long-term success. They operate according to the “walk quietly but carry a big stick” philosophy.
Over the last four months alone, they have done more to create a diversified, patient focused experience than almost any other psychedelics company that comes to mind. They have launched a virtual reality R&D program to help patients through the treatment experience and paired it with a scent-based virtual reality program to enhance the experience even further. Also, the company has incorporated the use of a cognitive assessment technology (NeuroCatch) and rapidly expanded its clinical presence across North America to 16 locations.
These are the types of strategic moves for which a company should be in the news. Digital therapeutics have the potential to make or break a clinical experience. And ensuring that patients have the best possible experience is the most practical way to build a lasting market presence, rather than through temporary hype and puffery.
Modern day marketing tactics can be confusing. Making it hard to tell which companies are building real businesses and which are fueled by hyperbole. It is up to investors to do their own due diligence and not just buy into hype machines. Psychedelics investors need to avoid the pitfalls that befell their peers in the cannabis industry. It is important to identify the real industry leaders. In this regard, Ketamine One is certainly doing the right things to be considered to be one of a few.
This article was written in partnership with Ketamine One. The content is promotional and does not necessarily reflect our opinions, however we only work with companies who we believe to be credible contributors to the psychedelic sector.