Move to legalisation of psychedelics could benefit CPH in the US

Creso Pharma Limited’s (ASX:CPH, FRA:1X8) target acquisition company Halucencex Life Sciences Inc. has signed a non-binding Letter of Intent (LOI) with leading nanotechnology company Sixth Wave Inc.

The LOI comes as California pushes to decriminalise psychedelics, which highlights the ongoing acceptance and regulatory shift towards psychedelics as an alternative treatment route for debilitating mental health conditions.

As such, there may be no better time for CPH to move into this sector.

Vancouver based Sixth Wave (CSE: SIXW) is focused on the development of nanotechnology that uses Molecularly Imprinted Polymers (MIPs) for imprinting, capturing and releasing substances at a molecular level.

Given every substance has a unique size, shape and chemical property, MIPs are developed and deployed to capture and extract target materials at the molecular level resulting in extraction efficiencies down to parts per billion.

Put simply, this means the technology results in more efficient extraction with higher yields and a purer product. The technology is expected to replace outdated extraction methods and drive down costs.

Sixth Wave’s products are currently being commercialised across a range of sectors including mining, health security with rapid virus detection and cannabis productions.

With regard to the Halucenex LOI, the companies will work together to develop a Definitive Agreement by 31 May 2021 that will define system requirements, identify target molecules to be purified, and develop psilocybin separation.

Sixth Wave will develop the molecularly imprinted polymers for use in the process.

Halucenex and Sixth Wave will work to develop beads and columns to assist in producing psilocybin isolate from distillation of the product.

This is important in that it would allow Halucenex to produce a natural pure psilocybin product for R&D, and for accurately dosing psilocybin for the treatment of mental disorders.

The companies will also develop beads and columns of other wellness components of psilocybe mushroom strains such as baeocystin and norbeocystin.

Halucenex will then be able to conduct research into the health and wellness benefits of these molecules without the hallucinogenic effects of psilocybin present.

This is beneficial for Halucenex in that it should complement the advisory agreement it signed on 12 April with Growing Together Research Inc. (GTR) to explore the genome sequencing of natural psilocybe.

Read: Creso Pharma’s target acquisition company announces expansion into other psychedelic compounds

Growing Together Research Inc. is a US-based biotechnology company focused on applying cutting-edge computational genomics and bioengineering to plant medicine.

The advisory agreement will allow Halucenex to gain a better understanding of components of psychedelic mushrooms and use for specific conditions.

Halucenex and GTR will be able to identify key psilocybe genetic markers, enabling its extraction and separation processes to provide purity and consistency of the compounds.

“The recent LOI with Sixth Wave is a very pleasing development for Halucenex and has the potential to provide considerable upside to near term clinical trial initiatives and cultivation activities,” non-executive Chairman Adam Blumenthal said.

Halucenex founder and CEO Bill Fleming said: “The agreement with Sixth Wave is a very important step and will provide Halucenex with another avenue to best understand the use of psychedelic compounds for a range of treatments and health benefits.

“We look forward to working with the group and utilising their patent-pending technology, alongside agreements with other key partners, to further our R&D initiatives, which will help us in our clinical trials and future product development.”

CEO of Sixth Wave Dr Jon Glucklman added: “The growth in medical evidence showing botanical psychedelics treatment efficacy for atypical depression, post-traumatic stress disorder (PTSD), and other conditions is compelling and suggests that the market for these substances in both clinical treatment and potentially outpatient micro-dosing will grow substantially.

“The application of our nanotechnology to this exciting market is an extension of our existing AffinityTM cannabinoid purification system. As Sixth Wave is in the final commercialisation efforts for AffinityTM this is a perfect time to be exploiting the design of that system to a new set of molecules.”

US legislation working in CPH’s favour

Recent legislative change in North America regarding the possession and use of psychedelic compounds, could benefit CPH and Halucenex in the future.

The recent motion to move towards the legalisation of psychedelic substances in California would certainly work in CPH’s long-term favour.

The legislative shift occurred 13 April 2021, when the Senate Public Safety Committee approved Senate Bill 519, which would make a wide range of psychedelic substances legal to use and possess for adults over the age of 21.

It would also see prior criminal offences for use and possession expunged.

For psilocybin, the legislation repeals provisions in the Californian statute that prohibited the cultivation or transportation of “any spores of mycelium capable of producing mushrooms or other material” that contain the psychoactive ingredient.

The bill has been introduced to progress a more health-focused approach to the use of psychedelic compounds and to address the current mental health crisis in the US.

Should the bill be made into law, CPH’s newly appointed Director of US Business Development, Mr John Griese, will work with the company to progress opportunities in this space in California.

“We applaud recent regulatory developments in California, which will pave the way for acceptance for the use of psychedelic compounds as an alternative treatment route for debilitating mental health conditions,” Blumenthal said.

“Much like recent cannabis reform, we anticipate that there will be a considerable legislative shift to promote the use of psychedelic compounds and through Creso’s pending acquisition of Halucenex, we are positioned to benefit from these reforms.”