As Health-Conscious Consumers Seek Fresh Nutritional Avenues, Artisanal Mushrooms Step Into the Light

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Apr 02, 2020, 08:30 ET

NEW YORK, April 2, 2020 /PRNewswire/ -- Realizing the connection between nutrition and mental health, companies from all sectors of the health and wellness realm are expanding their efforts to offer products that effectively enhance consumers' well-being — including nutraceuticals and functional products that tap into the power of mushrooms.

Champignon Brands Inc. (OTC:SHRMF) (CSE:SHRM) (SHRM Profile) is one of the innovators in this field, expanding through acquisitions and outside funding to support R&D and a growing product line focused on artisanal medical mushroom formulations and mushroom-infused functional beverage CPGs. The company's emphasis on nutraceuticals' role in both mental and physical health is resonant with the strategy of the Unilever Group (NYSE: UL), a company working to attain the highest nutritional standards for its fleet of products and recognizing its consumers' need for nutritional products that positively impact their health. Mind Medicine (Mind Med) Inc. (OTC:MMEDF) is a company focused on discovering, developing, and deploying psychedelic-inspired medicines—using compounds from mushrooms or LSD—in an effort to mitigate consumer suffering and improve overall health. As society warms to the idea of mushroom-infused teas and coffees, Starbucks Corp. (NASDAQ: SBUX), a frequent innovator in the food and beverage space, may soon be serving functional beverages alongside the worldwide favorite, coffee. Longtime champion of the benefits of plant-based protein, Beyond Meat Inc. (NASDAQ: BYND) is in step with society's increasing interest in getting more nutritional bang for its dietary buck.

Psychedelic mushrooms' active ingredient, psilocybin, shows potential to alleviate serious illnesses such as depression
As prominent investors commit to R&D, society's general understanding of the chemical's potential is growing
As consumers learn more about the humble fungi's benefits, more doors are opening to allow mushroom-focused companies increased market opportunities

To view an infographic of this editorial, click here.

Health-Conscious Consumers Consider 'Shrooms

The expansion of the functional food and drinks sector has created a new opportunity. While cannabis and CBD have taken these consumables beyond the traditional active ingredients of alcohol and caffeine, this diversification of the market has opened up consumers to new possibilities. Among those possibilities is the use of natural ingredients found in mushrooms.

For decades, these mushrooms have played a part in alternative culture—a subversive option for those looking to expand their minds. However, a better understanding of mushrooms and safe techniques to process them have made other options become available. Researchers are exploring how the psycho-active ingredient derived from mushrooms—psilocybin—could be safely used in health products and associated delivery platforms. Companies are emerging to take those promising new products to market.

Mushroom-Infused Tea as Entry Point

One of the leaders in the move to bring mushroom-infused wellness products to market is Champignon Brands Inc. (CSE: SHRM) (OTC: SHRMF) (FWB:496). A rare public company built around a mushroom-to-market strategy, Champignon is leveraging the growing functional beverages market as well as breakthrough medicinal therapy involving psilocybin and MDMA-based delivery platforms. Champignon's Vitality Teas brand offers a range of teas infused with ingredients derived from the most desirable artisanal medical mushrooms – Reishi, Chaga and Lion's Mane. This unique line of teas offers an entry point both for consumers and investors, providing an ideal opportunity for people to experience the health effect of mushrooms in a safe, familiar product, while allowing investors to participate in the mushroom market.

This is new territory, perfect for the flexibility and innovation that come with a young company. Champignon's strategy involves cultivating and distributing artisanal medical mushrooms and products derived from them, while maintaining control of its whole product chain. The company is laying the groundwork for what could become a significant new industry.

As a step towards both funding and legitimizing its work, Champignon is working its way onto the world's stock markets. SHRM began trading in Canada in February and is now in the process of securing listings in the United States and Germany, which would give the company access to significant new markets and investor bases.

Psilocybin – Mushrooms' Powerhouse Ingredient

The health-bringing potential of mushrooms stems from one chemical — psilocybin. The psychedelic molecule found in most psychoactive mushrooms, psilocybin is a naturally occurring, mind-altering substance that humans have made use of in religious and cultural ceremonies for centuries. While the effect of this specific chemical has been known for decades, its medical potential is only now starting to be recognized and explored.

A main possibility for the products of companies such as Champignon lies in treating challenging mental-health issues. Post-traumatic stress disorder (PTSD) and treatment-resistant depression (TRD) are widely recognized as serious issues affecting thousands of people on a daily basis. Depression costs an estimated $210.5 billion per year, and this has created an antidepressant drugs market valued at $13.69 billion in 2018, which is expected to expand to $15.88 billion by 2025. An article in The Journal of Clinical Psychiatry estimates the cost to employers of TRD alone at $48 billion per year.

Treatment of these illnesses can be challenging, and any medicine with potential to help will be welcomed by a huge raft of patients and practitioners. Research shows that psilocybin has potential to help with these disorders, and now both the medical profession and the markets are responding.

High-profile investors such as Peter Thiel, Tim Ferriss, Kevin O'Leary and Canopy Growth's ex-CEO Bruce Linton are all taking an interest. Linton and O'Leary have become seed investors in MindMed, which develops medicines based on psychedelics. Thiel is an early investor in mental health care Compass Pathways, which makes use of psilocybin. Ferriss has been a leader in fundraising for the new Johns Hopkins psychedelic research center.

With mental health high on the world's agenda and more companies opening the door to psilocybin, the likes of Champignon have a legitimacy and level of investor interest that would have been unimaginable a decade ago.

Emerging Mushroom Company Commits to R&D

There are no safe shortcuts when dealing with psychoactive chemicals, and so a great deal of R&D work is needed to bring mushroom-derived health products to market. That's reflected in the focus of companies entering this market as well as the academic institutions taking an interest.

Champignon has established a dedicated R&D laboratory. The facility will work on three distinct but connected issues around psilocybin and mushrooms:

How to integrate mushroom extracts as an alternative-medicine delivery system
Formulating bioactive compounds extracted from plants and fungi
Isolating and synthesizing certain plant and fungi extracts

The overall goal of this work is to research and distribute premium, medicinal, mushrooms-infused products that can be used to target high-margin markets as well as consumers open to the health and wellness benefits of mushrooms.

Getting this work right takes specialist expertise and oversight. To this end, Champignon is forming a special advisory committee to oversee its R&D. With members drawn from fields such as medicine, psychology, mycology, and pharmacology, the board will carefully evaluate the potential effects of its medicinal-mushroom formulations and the accompanying benefits in treating disorders such as depression, PTSD, and substance and alcohol abuse. Through these skilled and experienced specialists, the company will bolster the effectiveness and scientific validity of its work, providing reassurance to both customers and investors.

Retail and Acquisition Strategy

While R&D will provide mushroom companies with powerful new products, that alone isn't enough to ensure their viability. For that, they'll need to pair innovative products with sound business strategy.

Which strategies each company follows will depend upon their individual circumstances and leadership. For Champignon, acquisitions are playing a part. The company recently announced that it has entered into an agreement to acquire Artisan Growers Ltd., a craft-mushroom cultivator and supplier. Artisan Growers operates a mushroom facility cultivating a variety of organic craft mushrooms. This facility will be integrated into Champignon's mushroom manufacturing, formulation and distribution infrastructure to expand and strengthen SHRM's supply chain.

In taking this supply chain to consumers, Champignon has developed a retail strategy that aims to revolutionize the $200 billion functional foods and beverages sector by introducing exceptionally formulated mushroom-infused products. A combination of brick and mortar distribution, e-commerce sales and online influencer marketing is being used to quickly develop a retail base for the company's novel products.

To further expand its alternative medicine product range, Champignon recently announced the acquisition of Novo Formulations Ltd., whose manufacturing partner is capable of processing proprietary delivery systems in its 40,000-square-foot, GMP-certified, Health Canada-approved and Federal Drug Administration-approved manufacturing facility..

According to the announcement, Champignon plans to leverage Novoformulations' existing product development infrastructure and licensed affiliates to pursue psilocybin and MDMA-based formulations, with the objective of developing and commercializing rapid onset treatments capable of improving health outcomes, including depression, PTSD, and substance and alcohol use disorders. The current marketplace for pharmacologic DPS treatments in North America exceeds $10 billion annually.

Providing Healthy Products

The Unilever Group (NYSE: UL) continues to demand the highest degree of nutritional excellence from its brands and products. Unilever is the owner of Lipton Teas, a company which has long recognized tea's benefits in relieving stress and improving overall well-being. Proud of its heritage but not afraid to innovate, Unilever continues to assess every brand and product against its Highest Nutritional Standards and continues to offer more plant-based ingredients in its products.

Mind Medicine (Mind Med) Inc. (NEO:MMED) (OTC:MMEDF) has been investigating potential medical uses of psychedelics to ultimately create mainstream medication for neuro-psychiatric health issues. The company is striving to create a new way to address mental health problems. Through human clinical trials, Mind Med seeks to develop innovative psychedelic-inspired medicines to cure a range of issues, including addiction, depression, and ADHD, among others.

As the world ponders whether mushroom-infused coffee harbors untapped health benefits, Starbucks Corp. (NASDAQ: SBUX) is well positioned as a longtime innovator in the food and beverage space. Since drip coffee is considered a worldwide staple of many consumers' daily lives, a line of functional beverages could be in the company's future.

Longtime champion of the benefits of plant-based protein, Beyond Meat Inc. (NASDAQ: BYND) is in step with society's increasing interest in getting better nutrition out of what they feed their bodies. Beyond Meat continues to realize the benefits of health, sustainability, and animal welfare through its innovative line of products. The company believes its strategy effectively addresses four critically important and ever-increasing global issues: human health, climate change, limitations on natural resources, and animal welfare.

As research continues to unveil the hidden health benefits of artisanal medical mushrooms, a raft of new treatments could soon be on its way.

For more information about Champignon Brands Inc., please visit Champignon Brands Inc. (CSE: SHRM) (OTC: SHRMF) (FWB:496).

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