Why do we invest in companies maximising the therapeutic potential of cannabis and psychedelics?
Leafy Tunnel has been founded with the mission to back entrepreneurs who are aiming to maximise the potential of plant-based therapies providing relief from the pain, physical and mental stress and improving quality of life for both the person and their family. There are three main reasons for explaining our mission and investment thesis.
1) A Huge problem and unmet demand
More than 1 Billion people all over the world suffer from substance abuse, anxiety, post-traumatic stress, depression, and other mental illnesses. One in four people will suffer from neurological disorders at least once in their lives. 13.5 million deaths every year could be averted if the underlying mental ill-health problems were addressed[1]. Mental health disorders will become the leading cause of the global disease burden in ten years from now[2] costing the global economy 16 trillion US Dollars.
At the same time, neuropsychiatry has failed to innovate for the last 70 years. Due to high failure rates for clinical trials some big pharma companies were reducing funding for late-stage drug development and exiting the research and development area of neuropsychiatry. As a result, current depression treatments become inadequate for the needs of patients and rarely provide relief with a high rate of relapse and major side effects.
The US opioid crisis also a testament to the failings of the current standard of care. Addiction to opioid pain relievers was underestimated by the medical community in the 1990-s which led to devastating consequences of the opioid epidemic and public health emergency 25 years later. Only in 2018 alone opioid misuse cost the US economy $700Billion or 3.4% of GDP in the US[3].
2) Underexplored therapeutic potential of cannabis and psychedelics
Nature created almost an infinite array of molecular entities derived from plants. Certain plants such as marijuana and psilocybin mushrooms have their origins as medicinal plants thousands of years back and were commonly used in Asia and Native American cultures for religious, spiritual, and healing purposes. However, modern societies and media have placed a bad stigma on cannabis and psychedelics arising from racism and prejudiced view of users. The negative connotation was further exacerbated in the 1970-s with the introduction of the Controlled Substances Act in the US as part of the “War on Drugs” spearheaded by President Richard Nixon classifying cannabis and psychedelics as a Schedule 1 Drug. As a result of the negative stigma, to date, the therapeutic and medicinal benefits of these plant-based therapies still remain underexplored area.
Therapeutic potential demonstrated from clinical studies with cannabis and psychedelics is gradually breaking down their negative stigma. Cannabis is considered a promising alternative for use as a pain medication instead of the addictive opioid substances commonly used today. Medical research shows cannabis to be an effective tool in the treatment of chemical addiction resulted from the opioids epidemic. Psilocybin mushrooms have also demonstrated their effectiveness in treating multiple indications including depression, brain, and addiction disorders.
Cannabis and psychedelics are also considered less harmful and addictive than two legal substances, tobacco and alcohol according to a study by Prof. David Nutt and Lancet commission.
3) Regulatory tailwinds
2017 was an inflection point or point for no return for the legalization of marijuana in the US. More than 50% of US states have legalised its medicinal use with 11 states legalising recreational use as of today.
As the therapeutic benefits of cannabis are being recognized by medical communities Europe is following the same regulatory path as the US. The consumption of marijuana and its active components (THC and CBD) in various forms for medical purposes is already legal in 22 European countries with a full list presented below.
However, only five countries from this list have introduced reimbursement coverage from the healthcare systems. Although Europe is still in its early stage of cannabis legalization compared to North America with a market of over 742 million people across 50 countries and total healthcare spend of €2.3 trillion, Europe will be the largest medical cannabis market in the world.
Marijuana legalisation across the world has enabled societies to reconsider their attitude towards other stigmatised plant-based compounds including psychedelics. Last year two cities Denver and Oakland decriminalised personal use of psilocybin mushrooms with four major cities including Portland, Chicago, Berkeley, and Dallas to follow their suit this year.
Regulatory tailwinds create the window of opportunity for entrepreneurs and companies to develop their capabilities and transform the future state of mental health and palliative care.
Sources:
[1] Lancet commission report
[2] World Federation for Mental Health
[3] Council of Economic Advisers
