The Good Shroom Co Inc (CVE:MUSH), a consumer packaged goods company that produces a line of powdered instant wellness supplements made with mushrooms, has gone public today, April 28, 2021, on the TSX Venture Exchange.
In short, the company is a direct-to-consumer seller with strong retail potential capitalizing on what appears to be a durable health and wellness trend.
Here’s what you need to know about the company which was created through a three-way merger with its subsidiary Teonan Biomedical Inc and capital pool company Cluny Capital Corp:
Good Shroom operates two primary brands: Teonan, a line of powdered coffees and teas fueled by a bevy of what the company calls “functional mushrooms,” and Velada, CBD-infused versions of the same beverages, with THC editions expected to debut later this year.
Teonan and Velada beverages are sold primarily online in 30-serving pouches and can be dissolved in a cup of warm or cold water to create ginger tea, coconut coffee, hot cocoa or any number of drinks.
And if you’re turned off by the idea of the mushroom taste, you needn’t be, the company says. The drinks don’t actually taste like mushrooms, nor do they taste like a typical bitter or synthetic tasting supplement, but they do provide a host of immune system benefits.
To achieve that, Good Shroom turned to a supplier that uses a dual extraction method — first soaking in water, then in alcohol — to create the most potent form of six GMO and gluten-free, organic certified mushrooms. That’s expensive to do, says CEO Eric Ronsse, but it’s important.
“We knew before even launching the brand that if something doesn't taste good, it just won't sell,” Ronsse told Proactive. “The Mo of the brand is incorporating daily wellness into something that is not taking a pill or swallowing down some protein shake that tastes like crap ... We prefer taking a hit on margins and delivering to the customer something that is going to get them to continue coming back to us.”
Two stars of the mushroom show are Lion’s Mane, which contains a protein that helps protect and generate nerve cells called NGF, and Reishi, the Asia-grown longevity boosting “Queen of mushrooms,” so named because it was generally reserved for the privileged Chinese royalty who could afford it even thousands of years ago.
The branding has a tie-dye, psychedelic feel to it, not to mention an adorable axolotl mascot, and that isn’t an accident, Ronsse said. It’s the kind of thing his customers want to associate with.
Speaking of customers, Good Shroom’s base is niche, but one that comes back again and again for the wellness benefits its beverages provide. That’s why Ronsse says he puts a premium on customer service, which the company handles in-house rather than outsourcing it.
Expansion of that customer base could come as Good Shroom explores retail opportunities in Canada and the US. The company said it is engaged in ongoing discussions with major North American retailers that would represent a brand match.
Back in 2019, the then-Teonan Biomedical obtained a cannabis microprocessing license from Health Canada and began producing versions of four select beverages infused with potent CBD under the brand name Velada.
Each flavor contains at least 20 milligrams of CBD, which the company says is double that which comparable brands offer.
THC versions of the products are coming to Canada in 2021, and the plan is to sell to via Société québécoise du cannabis (SQDC) as well as across Canada through other private licensed retailers.
With THC on the horizon, Ronsse believes now is a great time to go public.
“We're a company that's driven by fundamentals,” he said. “We make sure that our margins are healthy, and that we're growing into a sort of omni-channel type of company. You're already seeing early stages of that with our sort of two-pronged approach.”
Ronsse himself comes from a background in logistics more specifically food and pharmaceuticals, and he has a decade of executive leadership and management experience. He previously grew a logistics company from a 28,000-square-foot operation to a 255,000-square-foot operation, and a CPG company he founded and later sold distributed products in more than 400 outlets in Asia.
He has long been a user of functional mushrooms himself — his ‘shroom of choice is Lion’s Mane — but the product he would buy tasted strongly of, well, mushrooms. Eventually, he and his partner decided to look into creating a better-tasting product that was sustainably sourced and delivered on immune benefits.
Zooming out, functional mushrooms have their place within the larger organic food and nutrition-focused trend that has emerged strongly over the past decade. Consumers are looking for more options to tailor their food and beverage intake, and Ronsse believes this sort of nutrition narrowcasting is here to stay, as evidenced by the popularity of ketogenic diets, plant-based meat products and even a company like Coca-Cola making sugar-free sodas.
Ultimately, the point is just to be healthier and, hopefully, live longer. Functional mushrooms and Good Shroom beverages are at the forefront of that market.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel