A proposed bill to decriminalise the possession and sharing of psychedelic drugs in California has seen Creso Pharma (ASX: CPH) and its acquisition target Halucenex expedite a market entry strategy for psilocybin compounds as an alternative treatment route for debilitating mental health conditions.
Bill 519 was passed by the California state senate overnight and will now head to the Assembly where, if approved, could result in the legalisation of psilocybin (the key ingredient in magic mushrooms) and other psychedelic compounds for adults over 21 years of age.
To remove the stigma around psychedelics as a medical alternative, the law would also remove prior criminal offences relating to the use and possession of these compounds.
The development creates a major market opportunity for Creso Pharma and Halucenex to become become one of the first movers in what is anticipated to become a considerably large market.
In preparation for the Bill to progress from the Assembly across to the governor’s desk and into law, the companies have commenced working with Creso’s US business development unit, as well as a strategic advisor and leading psychedelics entrepreneur to progress entry strategies and delineate regulatory requirements
Halucenex is also progressing discussions with strategic scientific consulting firm and US-based partner HeteroGeneity LLC to accelerate a development plan for its botanical psilocybin products and compounds to be made available for the US market.
Bill 519 was introduced in February by US senator Scott Wiener to progress a more health-focused approach to the use of psychedelic compounds and address the current mental health crisis in the US.
It is a rebuke of America’s decades-long “war on drugs” and seeks to decriminalise many psychedelic and hallucinogenic substances which may have applications to treat a range of mental health ailments.
Halucenex founder and chief executive officer Bill Fleming said the bill highlights an ongoing acceptance of psychedelics as a treatment option.
“The passing of this legislation through the senate highlights a significant shift in the acceptance of psychedelic compounds as an alternative treatment method to common and debilitating diseases,” he said.
“Creso has considerable bench strength which we will leverage, as well as in-country personnel who will be able to progress potential partnership opportunities, regulatory approval processes and future licencing agreements.”
US market listing
Creso is also pursuing DTC (depository trust company) eligibility for an OTCQB venture market dual listing, which will allow for real-time electronic trades of its securities and easier access for North American investors.
The OTCQB is the mid-tier equity market run by OTC Markets Group, which lists primarily early-stage and developing companies in the US and international markets.
Creso’s listing is expected to take place in the near term.
Non-executive chairman Adam Blumenthal said it would provide additional exposure for the company during what is expected to be a “pivotal growth period”.
“Over recent months, we have made a number of US-focused appointments and Halucenex has secured multiple partnerships and agreements which will allow [us] to pursue the US psychedelics market,” he said.
“The board and management team are assessing strategies to expedite a US market entry and will leverage our existing partnerships and technical expertise in the psychedelics space to unlock further value for shareholders.”