In this edition of "Rising High," The Fly conducted an exclusive interview with Matt Stang, founder and chief executive officer of Delic Holdings Corp (DELCF), a platform focused on advancing access to psychedelic wellness. Here are some highlights:
PSYCHEDELIC WELLNESS: Delic is a psychedelic wellness platform aimed at bringing science-backed benefits to consumers and patients as well as reframing the conversation around psychedelics. The company owns and operates an umbrella of related businesses including media platforms Reality Sandwich and Delic Radio, ketamine clinic Ketamine Infusion Centers, psychedelic wellness event Meet Delic and Delic Labs, a Health Canada-licensed entity focused on research and development of psilocybin vaporization technology. “Overall we’re looking to destigmatize mental health and really mainstream psychedelic wellness as a much more accessible and efficacious modality for folks who have anxiety or depression or PTSD,” Stang said. “What I’ve seen doing this over the last three years is that there is just so many people who have felt trapped in their mental health issues and haven’t been seeing a real pathway out.” He noted that consumers using standard psychopharmaceuticals to treat mental health issues report efficacy rates of about 4%-5%, but he has seen efficacy ranging from 60%-80% for psychedelics. “We believe treatment for serious conditions like depression, anxiety, PTSD and other mental health issues should actually fix the issue, not just the symptoms,” the CEO said. “We are also disrupting traditional treatment for many mental health issues with ineffective results and significant side effects. Psychedelic wellness treatments for many conditions work 7-800x better and have a fraction of the side effects as traditional treatments. If you have a serious mental health issue in your life, we want to help you fix that, not just treat the symptoms when they arise.” Seeing the results of psychedelic wellness can be really heartwarming, he said. “My wife and co-founder [Jackee Stang] has an anxiety disorder and she used ketamine, which is the only currently legal FDA-approved psychedelic,” Stang said. “It’s been a life-changer and it’s really just incredible to watch.” He added Delic’s strategy will continue to focus on making psychedelic wellness accessible to the masses and growing it across the country so consumers can find safe and effective wellness experiences near them.
COMPETITIVE EDGE: When asked about rising competition in the psychedelic space, Stang pointed to Delic’s focus on people, industry experience and data as key differentiators. “The clinic chain that we bought [Ketamine Infusion Centers] they have their own purpose-built ERP for monitoring and tracking patients for results,” he said. “Having an incredible ability to understand what works for each individual and how, and then being able to replicate that for more people, I think that’s such a huge thing.” The CEO also said accessibility is another key factor that sets Delic apart. ‘We’ve worked really hard to get insurance coverage and make sure that people who need it are able to get it without having to come out of pocket,” he said. “That is a hugely important bit as this goes mainstream. Insurance coverage changes the accessibility and the number of people who can afford to do this.”
KETAMINE STRATEGY: Delic aims to become the largest provider of ketamine in the U.S. today and the CEO said the potential benefits of the psychedelic are massive. ““We are building the largest and most accessible chain of psychedelic wellness clinics in the country and a scalable ecosystem to increase revenue, margins and patient base,” he said. “As future psychedelic treatments are legalized we will offer additional options across the largest provider network, no matter where you’re located in America, with a keen focus on serving 2nd cities and the bulk of the population. Having spoken and interacted with hundreds of patients over the last couple years, I’ve seen people with PTSD, treatment-resistant depression and anxiety. To me, it’s a total reset of the brain and you have this incredible opportunity to understand that you don’t have to be stuck in this unwelcome cyclical mental state.” Stang noted the brain’s default mode network, an interconnected group of brain structures that is a beneficial part of the human psyche but when overdeveloped can cause a lot of depressive tendencies. “What ketamine does so spectacularly well is it literally disassociates you from that default mode network,” he said. “You’re able to come back and not be depressed or anxious or filled with PTSD and over the course of time, it can help train your brain on how to not get stuck in those negative neuropathways.” The CEO added there is huge room for expansion within the ketamine market. “One clinic operating successfully can treat about 150 patients a month so the total addressable market in America at the lowest end of the scale is a couple million people and it’s probably much higher after 18 months of trauma and horror,” he said, noting last year produced three times the highest number of suicides ever recorded. “There’s going to need to be thousands of these clinics to really sustain the number of people who need psychedelic therapy as MDMA and psilocybin come online.” The company announced in July the completion of its acquisition of Ketamine Infusion Centers, which operates treatment clinics in Arizona and California. “We saw their ability after looking at dozens of other clinics to make patients really happy and help them change their lives beneficially in a way that was reproducible and scalable,” Stang said. “We also think they’ve done an incredible job of making things accessible in terms of price point and getting insurance coverage. All of those things allow the clinic to get much bigger and for us to grow and scale the business.”
MEET DELIC: On November 6th-7th in Las Vegas’ AREA51, Delic is holding the world’s first psychedelic and wellness edutainment event called Meet Delic, which will feature entrepreneurs and business thought leaders within the psychedelic space. “The benefits are myriad for folks who are interested,” Stang said. “There’s an entire track on the business of psychedelics with 35 of the top leaders in psychedelic business coming to talk. We also have scientists, health and wellness folks and celebrities. Everyone coming together, all with incredibly nuanced, interesting opinions.” He added attendees will also be able to get some connection and interaction that has been lacking for the last year and a half. “As industries go from black to gray to white, there’s this amazing opportunity to bring together people across the field and have them together in one space to connect, create and talk,” the CEO said. “It helps build the industry as a whole.” He invited those interested in the space or how psychedelics can aid in living a better life to attend. “We have 100 speakers across all those different pieces coming to tell you more about it,” he said. “It’s an unmissable event if that’s your interest level and having all of these people together in one space will really help mainstream and demystify psychedelics.”
CORONAVIRUS: The coronavirus pandemic has impacted many companies globally and Stang said he believes the outbreak compounded a mental health crisis that was already ongoing. “What that does is it makes it even more important to figure out new ways to deal with mental health,” he said. “If you just use what’s available then as we saw, thousands upon thousands of people will lose their lives or their livelihoods because they’re unable to get out of their overactive default mode network.” The CEO also said he expects the pandemic to accelerate the adoption timeline for psychedelics. “People are just sick and tired of being sick and tired and unwilling to keep doing the same thing that’s not having any real results,” he said. “The Office of National Drug Control Policy published their Drug Use Summary and it showed that 4.5% of Americans had tried psychedelics for mental health purposes illegally which is four or five times where it was the year before.” Consumers are becoming more knowledgeable about psychedelics, Stang said, but there are no valid mechanisms other than through the clinics for which people can access psychedelic wellness. “The public and interest is there and the infrastructure and FDA have to catch up,” he said.
U.S. DRUG SCHEDULING: When asked about the potential impact of the Biden-Harris administration on the industry, the CEO said he believes its unlikely leadership will come from the federal government in any direction. “They have different factions pushing from both edges,” he said. “One pushing for an end for the War on Drugs the other one pushing for them to look tough on crime. What I expect is some form of paralysis at the administrative level.” However, when looking at the last election, Stang said every single ballot initiative to amend the laws around drugs passed with overwhelming bipartisan support. “The voters have spoken over and over again and they’re done with this War on Drugs,” he said. “How that actually works out from a policy perspective, you have the FDA and that’s going to allow I believe psilocybin and MDMA in the next year for medical purposes. Ketamine is already allowable for medical purposes so there’s the medical model and then there’s programs like Oregon’s therapeutic model.” The CEO also noted New Jersey and Washington D.C. recently decriminalized mushrooms for possession. “There’s a huge ground around entheogenic plants, mushrooms in particular,” he said. “I think it will play out like cannabis where municipalities, counties and states will legalize, they’ll experiment and it will be better than it was before.”
CHALLENGES: When asked about the largest hurdles facing the space, Stang cited the timeframe and the capital it takes for clearance by the FDA. “It’s hundreds of millions of dollars to get something approved that’s already been used in psychiatric care and long-term scientific work for dozens and dozens of years,” he said. “That’s a big challenge.” The CEO also said righting the wrongs of the War on Drugs creates some obstacles in the industry. “Psychedelics are not there to try to dismantle society,” he said. “They are there to help peoples’ mental wellness. And they’re more effective than anything else at dealing with certain mental health conditions by orders of magnitude. That was a big left turn that happened in the mid-to-late sixties and it was very reactionary. At this point the mainstreaming message is the biggest opportunity and that’s what Delic is really working on.”
OPPORTUNITIES: As the psychedelic space develops, the CEO said he sees the largest opportunity in opening additional clinics. “There’s just such a huge opportunity,” he said. “Psychedelics really are so beneficial and can help change people’s mental health so much for the better.” Stang encouraged those who want to learn more to attend MEET Delic or to check out the company’s Reality Sandwich website. “What we’re providing are so many resources for people to learn, dip their toe in and then if they want to try it, they can come to one of our clinics to experience psychedelic wellness.”
OTHER CANNABIS/PSYCHEDELIC STOCKS: Other publicly-traded companies in the space include Acreage (ACRHF), Akerna (KERN), Aleafia (ALEAF), Aurora Cannabis (ACB), Ayr Wellness (AYRWF), BC Craft (CRFTF), Body and Mind (BMMJ), CanaFarma (CNFHF), Canopy Growth (CGC), RIV Capital (CNPOF), Clever Leaves (CLVR), Columbia Care (CCHWF), Compass Pathways (CMPS), CordovaCann (LVRLF), Cresco Labs (CRLBF), Cronos (CRON), CV Sciences (CVSI), Curaleaf (CURLF), CURE Pharmaceutical (CURR), Delta 9 (DLTNF), Emerald Health (EMHTF), Fire & Flower (FFLWF), Flora Growth (FLGC), FluroTech (FLURF), Gage Growth (GAEGF), General Cannabis (CANN), Greenlane (GNLN), Green Thumb (GTBIF), GrowGeneration (GRWG), Harborside (HBORF), Hemp (HEMP), HEXO (HEXO), High Tide (HITI), IM Cannabis (IMCC), India Globalization Capital (IGC), Indiva (NDVAF), Inner Spirit (INSHF), Innovative Industrial Properties (IIPR), Khiron Life Sciences (KHRNF), Lowell Farms (LOWLF), Lotus Ventures (LTTSF), MediPharm Labs (MEDIF), MedMen Enterprises (MMNFF), MJardin Group (MJARF), Neptune Wellness (NEPT), Thermic Science (ENDO), Organigram (OGI), Planet 13 (PLNHF), Skye Bioscience (SKYE), SLANG Worldwide (SLGWF), Sproutly (SRUTF), Stem Holdings (STMH), Sundial Growers (SNDL), Sunniva (SNNVF), TerrAscend (TRSSF), Tetra Bio-Pharma (TBPMF), Tilray (TLRY), Trulieve (TCNNF), Valens (VLNCF), Village Farms (VFF), Goodness Growth (GDNSF), WeedMD (WDDMF) Zynerba (ZYNE) and 4Front Ventures (FFNTF).
