Psychedelic substances - outlawed in 1971 by the Nixon Administration in the US - are now re-emerging as a potential treatment to address the nation’s mental health crisis, including post-traumatic stress disorder, treatment-resistant depression, and severe anxiety.
As the gradual mainstreaming of psychedelic medicine gains momentum across North America, Irwin Naturals Inc. (CSE:IWIN) a renowned household nutraceuticals brand, is positioning itself to become the largest chain of clinics and the best-known brand in psychedelics-assisted mental health treatments.
In other words, Irwin Naturals is poised to become the 'Coca-Cola', or Jenny Craig of the space. What is driving this ambition is the company’s vision to make these treatments affordable and accessible for all - including BIPOC (Black and Indigenous people of color), minorities, and veterans. The company will be able to do this by leveraging its highly successful nutraceuticals brand and the distribution and marketing infrastructure that comes with being known by over 100 million North Americans following 28 years of profitable operations.
READ: Irwin Naturals initiates rollup of psychedelic mental health clinics
“We sell nutraceuticals to some of the biggest publicly traded retailers, we've been around 28 years, and we're a household name,” Irwin Naturals CEO Klee Irwin told Proactive in an interview. “We are a trusted partner to many, and the fact that we're coming into the space, is a sign of the times to many people that this is not so scary.”
Irwin, who has been on a personal mission to raise consciousness through scientific breakthroughs since 1995, says the key reason for entering the space is that he and his team recognized the importance of ketamine-based treatments. He told Proactive that the mental health crisis requires attention on an “emergency basis.”
The CEO noted: “Mental health issues are growing exponentially, whereas other major diseases are growing linearly. This greatly worries me, as the impact of mental health on individuals and society at large is so profound. The WHO [World Health Organization], for instance, estimates that the costs associated with mental health issues will reach $6 trillion by 2030. Traditional treatments achieve positive response rates of only 10-20%, as compared to 60-65% for ketamine-based treatments. We believe we can make a difference by leveraging our existing infrastructure and our financial strength to bring this incredibly effective and much-needed treatment to the masses."
Irwin said he sees strong potential in the ongoing research on psychedelic substances to find a cure for mental health issues. In the past three years, dozens of peer-reviewed clinical papers on the therapeutic benefits of psychedelics have been published. This has resulted in strong interest from treating physicians and mental health workers, as well as insurance companies.
“Irwin Naturals wanted to ask the question, ‘How can we help?’” Irwin said.
First of all, he said: “We can help by entering into a category of psychedelics that has been demonized by much of the establishment since the 1960s.”
The resurgence of psychedelic research, popularly termed the Psychedelic Renaissance, has furthered in-depth scientific inquiry around substances like ketamine, MDMA, DMT, and mescaline. However, it continues to be associated with confusion, stigma, and fear among many people. Much like the destigmatization of cannabis, which is still a controlled substance at the federal level, ketamine is now rapidly entering the mainstream.
The anticipation is that other substances will successfully complete the US Food and Drug Administration (FDA) process towards approval, opening the door for a huge improvement in mental health statistics on a global basis. Irwin Naturals intends to be the big brand early mover in the space.
A groundbreaking national chain for psychedelic mental health clinics
Irwin told Proactive that he has been contributing his “personal time” to realize the strategy to make psychedelic medicine the main contributor to Irwin Naturals’ top and bottom lines, as the company moves towards the roll-up of ketamine clinics across the US and Canada.
“I would compare the strategy to Jenny Craig,” Irwin said. A few decades ago, he explained, there were a few clinics in California and New York, where people would work on weight loss and learn how to eat right and exercise in order to avoid the adverse health effects of being overweight."
“But it was not affordable or available to people in the Midwest or any state where there would be a greater concentration of people in lower-income groups,” he added. “Jenny Craig recognized that as a huge need and a huge business opportunity, and was able to convince investors to help set up a national footprint of clinics.”
Down the line, Jenny Craig was able to drive down patient acquisition costs as they built over 600 clinics across America and Canada, Irwin said.
Irwin Naturals sees roll-ups, or acquisitions, as the fastest way to achieve similar results for the psychedelic industry. “We are looking to roll-up profitable existing businesses that are already treating people with ketamine psychedelic mental health therapy. We invite them to become part of our family and offer to buy them for stock,” said the company's CEO.
“There are 600 ketamine clinics in America, some in Canada,” continued Irwin, “and over a thousand mental health and behavioral health clinics that can be acquired, and you can add ketamine as one of their treatment offerings.”
He noted that the quantity of profitable clinics that the company can acquire with stock purchases is substantial.
Irwin Naturals will focus on paying in stock to acquire the clinics. “The leverage of the valuation on our stock is generally a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortization) relative to the multiples that we’re planning to pay for the clinics,” he explained. “Every time we do an acquisition, we try to make it extremely accretive for our investors and that’s my primary focus.”
Irwin believes that a simple principle of scaling clinics will drive down patient costs and still be easily profitable. “Ketamine itself is not expensive and to have somebody supervise the treatment is also not that expensive,” he said. “Yet, the average price for a single ketamine treatment for one session is about $500, and you need multiple sessions.”
Insurance companies are generally not providing coverage for psychedelic-assisted therapies at the moment, and only the prescription nasal spray form of ketamine, Spravato (esketamine), can be reimbursed. Clinics, however, prefer working with the intravenous form, which isn’t generally covered by insurance companies.
“Until insurance companies do pay, we need to be responsible towards the national crisis and not try to exploit the situation by simply charging what the market will bear,” Irwin said. “Instead, we need to come in and lower costs in an attempt to become a high-velocity mover for the masses.”
What comes next
There is an active and growing push for psychedelic compounds, such as MDMA and psilocybin, to be legalized in the coming years, which Irwin said will make the marijuana legalization timeline “look like centuries.”
On the cannabis front, Irwin Naturals has similar plans to capture the North American market and become a household brand as the US federal government considers federal legalization.
“We will have the first-mover advantage when it comes to other nationally recognized brands, and for whoever gets there first, it will be a historic event,” he said. “We're trying to move in quickly this quarter and grab it.”
Irwin concluded, “We have a history of success: 28 years of growth and profitability. We have the network, we have the people and we have the financial strength. Most importantly, we have ambition and passion. There is no reason why we can’t succeed and become the globe’s most recognized name in mental health clinics. As to cannabis, this is a very high margin opportunity for us. With no brands known by more than 1% of the US population, while Irwin Naturals is known by over 100 million Americans, we have an enormous advantage that we are capitalizing on.”
Contact Ritika at ritika@proactiveinvestors.com