Company Overview
Founded in 2014, The Yield Growth Corp. (“YGC”) is a health and beauty consumer packaged goods company selling plant-based products. Its portfolio includes over 200 proprietary beauty, wellness, edibles and beverage formulas that are at various stages of commercialization. It intends to become a leader in the burgeoning psychedelic medicine industry.
It sells its products through e-commerce platforms worldwide and through retail stores in 3 countries with distribution agreements in place for 12 more countries. To date, they have filed 15 patent applications for use in the global wellness market, estimated at US$4.2 trillion by the Global Wellness Institute.
The Company trades on the Canadian Stock Exchange under the ticker “BOSS”. Additionally, it has also listed on the OTCQB market as well as on the Frankfurt Stock Exchange.
Psilocybin Capabilities
Among YGC’s many subsidiaries, the one we want to focus on today is NeonMind Biosciences (previously Flourish Mushroom Labs). They are launching a line of medicinal mushroom products and developing intellectual property in the emerging market of psychedelic medicine.
The subsidiary aims to commercialize psilocybin mushrooms and improve life by offering high-quality medicinal mushroom-infused products legally and safely. As a result, it is currently conducting research into potential therapeutic benefits of compounds found in magic mushrooms. Subsequently, it has filed U.S. patent applications for its extraction technology and for certain therapeutic uses of psilocybin and magic mushrooms.
Its catalog of mushroom formulas stands at around 145, which it seeks to apply to the booming functional food market. They have the potential for application across in ready-to-eat packaged foods including soups, teas, hot cocoa, elixirs, and truffles. Furthermore, this will develop into a foundation for the cordyceps business (medicinal mushroom applications).
In addition, Neonmind has established a Company in Saint Vincent and the Grenadines. Through Acres Flourish Labs, it plans to construct a laboratory to cultivate psilocybin mushrooms and to carry out R&D activities.
NeonMind Biosciences has also acquired an 18% stake in Translational Life Sciences (“TLS”), a biotechnology company seeking to develop formulas containing restricted substances (such as cannabis and psilocybin) that may have medical applications.
The Company has already begun to file provisional US patents for their psilocybin ‘treatments’. These include:
- Administering of psilocybin/psilocin microdoses in order to encourage weight loss by reducing food cravings
- Counteracting compulsive overeating and increasing metabolism
- Treating diabetes and regulating blood glucose
- Reducing susceptibility to cardiovascular disease, high blood pressure, diabetes mellitus and other illnesses associated with obesity
Recent Developments
6th May 2020: Entered into an agreement with TLS to initiate clinical trials to test certain potential therapeutic effects of psilocybin and other related compounds in psychedelic mushrooms. Subsequently, The two will work together to conduct the evaluation of psilocin/psilocybin on cravings, on metabolism, on food addiction, and on glucose and hormone levels.
3rd March 2020: Announced that it has licensed the U.S. rights to its mushroom extract manufacturing technology (protected by a U.S. provisional patent application) to Kingdom Brands.
The patent application covers the invention of a unique mushroom extract and a method of manufacturing the extract from mushrooms including psilocybe mexicana, and formulations and emulsions containing the mushroom extract.
Investment Rationale:
Yield Growth Corp looks like an attractive reason for the following reasons:
Proprietary Formulas & Technology
- YGC has proprietary extraction technologies for CBD & THC extraction as well as for the production of hemp root extract
- Has developed or acquired 200+ high-quality product formulations for edibles, topicals & beverage with 12 patents currently pending
Diverse Revenue Streams
- Revenue is driven by e-commerce sales, sales & distribution partnerships as well as product licensing and services provided through various subsidiaries
Growing Market for Cannabis, Hemp Edible Mushroom Wellness Products
- Relaxing regulations, secure intellectual property and intimate understanding of the luxury consumer market positions YGC to capitalize on the huge potential of the growing psychedelic medicine market
- Major strides have been taken towards the decriminalization of psilocybin mushrooms in many U.S. states including Washington D.C, California, Colorado, Vermont, and Oregon. For instance, In California, the Psilocybin Decriminalization Initiative envisions the implementation of a state-wide scheme regulating the cultivation and distribution of psilocybin mushrooms
Outlook
The global edible mushroom market is an extremely exciting sector of the overall psychedelics industry. We can expect to see it grow at a CAGR of 8.0% to US$74bn by 2024 providing huge opportunities for companies such as NeonMind Biosciences to capitalize upon.
Psychedelic therapy is thought to have the potential for treating a variety of mental illnesses; labeled a “breakthrough therapy” for the millions of people suffering from mental illnesses. One hundred million diagnosed with major depressive disorder (MDD) are said to suffer from treatment-resistant depression (TRD). This accounts for ~33% of MDD cases. The FDA’s decision to fast track the testing of psilocybin could allow for psychedelic mushrooms to penetrate this market and provide companies such as NeonMind to unlock huge revenue potential.
According to the World Health Organization, in 2018, more than 1.9bn adults, 18 years and older, were overweight. Global projected market for weight loss and weight management is estimated at US$245bn, according to marketsandmarkets. This is over 12x the size of the global anxiety disorder and depression treatment market which is forecast to reach US$19bn by 2026.
Evident from the above, the potential market size which the Company could cater to is massive. Neonmind expects to be one of the first to legally produce psilocybin mushrooms. Furthermore, the limited competition within this space also augers well for them. Given YGC’s relatively low capitalization (US$120mn as of May 21, 2020), success in clinical trials going forward & product launches in the future could provide serious upside to the Company’s valuation.
Disclaimer: The Author of this report certifies that: (1) He does not hold any equity position in the Company and (2) the views expressed in this report reflect his personal views about the subject matter discussed.
[stock_market_widget type=”info” template=”block” color=”default” assets=”BOSS.CN” fields=”logo_name,symbol,description,industry,sector,website,phone,employees_count,country” api=”yf”]
