Bloomberg
A startup just listed on the Canadian Stock Exchange has a business model based on a provocative prediction: legal cocaine is coming.
Safe Supply Streaming is betting on a socalled third wave of policy changes that would decriminalize hard drugs, following similar measures that have made marijuana and psychedelics more popular.
According to CEO Bill Panagiotakopoulos, the startup plans to acquire companies that could benefit from it, such as makers of fentanyl test strips, addiction treatment clinics and energy drinks containing coca leaves.
The company was worth about $8.6 million (R$44.4 million) at market close on Wednesday (4) based on its approximately 79 million shares, compared to a valuation of $14.6 million (R$75.4 million) in its latest round of financing.
Safe Supply has provided investors with estimates that legal cocaine could represent a US$2.3 billion (R11.8 billion) market in the Canadian province of British Columbia, which recently decriminalized the drug.
Safe Supply’s founders promote a comprehensive vision of global decriminalization and support legislation that would treat the sale of drugs like any normal product and make them regulated, sold and taxed based on the belief that legalization will alleviate a drug crisis and reduce the number of drugs would reduce overdose deaths.
In a presentation document whose cover image shows a young man balancing on a tree branch above a nighttime city skyline, Safe Supply presents its business plan as a way to “build a better world and help responsibly fight the war on drugs.” finish”.
“We’re going to start building an ecosystem, get to market cap as a publicly traded company and start acquiring all of these companies that the general public hasn’t yet recognized are drug companies,” said Michael Astone, the board’s adviser sits at Safe Supply and is CEO of ArcStone Securities & Investments, one of the company’s backers.
Successive governments have adopted the vision of legalizing hard drugs. Portugal decriminalized it in 2001, and the US state of Oregon followed suit in 2020. Earlier this year, British Columbia’s decriminalization experiment came into effect, covering everything from heroin to methamphetamine. And a few months ago, authorities in Bern, Switzerland, announced a pilot program to legalize cocaine sales.
Canada has a “safe supply” program that aims to prevent overdoses by providing opioids, stimulants and other medications. Canadian companies such as Lucy Scientific Discovery and Filament Health have announced agreements with Health Canada that enable cocaine research.
However, there is no data to support the notion that legal, regulated cocaine supplies would reduce the costs of overdose deaths. Even though Vancouver has introduced measures to make drug use safer, the city remains mired in an epidemic of drug addiction and crime.
Jason Hockenberry, department head at the Yale School of Public Health, said legalization would likely remove the stigma of drugs and encourage experimentation, wider use and, ultimately, addiction. “If you ask someone if they would try it, they might say no. But then he meets someone who says, ‘I do cocaine every Friday night,’ and that changes his mind,” he said.
Hockenberry was unfamiliar with Safe Supply Streaming. But he drew an analogy based on the startup’s investment model. “If AnheuserBusch or Bacardi suddenly said they would use part of their revenue to invest in Betty Ford clinics [de reabilitação]“Can you imagine the negative reaction?” he said. “That would never be accepted.”
Ronan Levy, former CEO of psychedelics company Field Trip Health & Wellness and member of Safe Supply’s advisory board, refuted that characterization. “We don’t see any conflict in this,” he said in an email response. “There is an immediate and growing need for new investment in treatment and recovery facilities.”
Safe Supply’s investors include Jonathan Goldman, heir to a Canadian real estate company, and Steve Arbib, founder of MedReleaf, a pioneering cannabis producer. According to the company, both invested in Safe Supply through a private offering and through shares in Origin Therapeutics. Safe Supply announced a reverse takeover of Origin, a psychedelics company, earlier this month to go public.
Goldman did not respond to a message seeking comment, and Arbib declined to comment.
“We are talking to investors and family offices who have made money from cannabis and understand the drug trade,” Astone said. “Not everyone will believe that a wave is coming.”