Some investors in Vancouver's newest publicly traded psychedelics company made a great deal of money, on paper at least, in the first week of trading.
On Tuesday (September 8), HAVN Life Sciences shares were listed at $0.50 on the Canadian Securities Exchange.
By the close of trading on Friday (September 11), they reached $0.66, a gain of 32 percent.
In a preliminary long-form prospectus filed on June 9, HAVN Life Sciences disclosed that its two largest shareholders were former Surrey councillor Barinder Rasode and NHS Industries CEO Robert Nygren.
According to the prospectus Rasode and Nygren each held 4,315,280 common shares.
Based on their common shares alone—had they not been sold—Rasode and Nygren would have each made a paper profit of $690,444.80 over the first four days of trading.
They are each executive cochairs of the company and will receive a monthly base salary of $10,000.
Another director, Vic Neufeld, is the former CEO of Aphria Inc., a licensed cannabis producer based in Leamington, Ontario. The prospectus states that he has 800,000 common shares.
His paper profit would have been $128,000 over the same period, had these shares not been sold.
In addition, at the board's discretion, Rasode and Nygren will each be eligible for 4,500,000 performance warrants pursuant to their employment agreements.
If these warrants are granted, this will enable them to acquire the same number of common shares at $0.05 each, for a period of three years, from the date they were issued.
The company is developing formulations for clinical trials of psychedelic therapy's effect on posttraumatic stress disorder and other trauma-related conditions.
"Our mission is to unlock human performance using evidence-informed research," HAVN Life Sciences states on its website. "We are focused on standardized, quality-controlled extraction of psychoactive compounds from plants and fungi, and the development of natural health care products from novel compounds."
On August 31, the company's wholly owned subsidiary, HAVN Research Inc., obtained an exemption from the Controlled Drugs and Substances Act, allowing it to possess pure psilocybin for scientific purposes.
Under section 56, Health Minister Patty Hajdu is permitted to grant such an exemption even though psilocybin—a psychoactive compound in magic mushrooms—is illegal under the legislation.
One of the members of HAVN Life Science advisory board is Sheila Copps, a former Liberal cabinet minister and deputy prime minister under Jean Chrétien.
The co-CEOs, Tim Moore and Susan Chapelle, will each be paid an annual salary of $144,000. Moore is the former CEO of Green Growth Brands.
On September 10, HAVN Life Sciences announced that it had granted more than 2.1 million stock options—exercisable at $0.65 for five years—and 500,000 restricted share units as part of its share-based compensation plan.
Moore's employment agreement decreed that he would receive 500,000 restricted share units, as well as 500,000 stock options.
The prospectus disclosed that Chapelle would receive 1,000,000 performance warrants on top of her salary.
Numinus shares far off their high in May
The history of psychedelic treatments and research is covered extensively in How to Change Your Mind, a 2018 bestselling book by Michael Pollan.
That played a role in whipping up excitement in the investment industry.
Earlier this year, a Vancouver psychedelics company, Numinus Wellness, was licensed by Health Canada to test, buy, and sell MDMA, psilocybin, psilocin, DMT, and mescaline.
But its shares have not performed as well as HAVN's.
Numinus Wellness shares closed at $0.23 on Friday on the Canadian Venture Exchange.
The company went public on May 20 at $1 per share, shooting up to $1.55 that day before closing at $0.80. The 16.9-million share volume on the opening day has never been matched since, nor has the $1.55 per share price.
According to the company's annual information form, filed on May 22, CEO Payton Nyquvest owned nearly 8.2 million shares, holding 9.24 percent of the company.
The document disclosed that the board's second-largest shareholder is chief operating officer Stacey Wallin with 1.07 percent.
On September 10, Numinus Wellness announced that it raised $4.6 million through the sale of 18,400,400 share units at $0.25 each.
These units consist of one common share, as well as a half-share purchase warrant exercisable at $0.35 for up to 24 months.
Core One Labs order lifted
Last month, another, publicly traded Vancouver company in the psychedelics space, Core One Labs Inc., finally filed its audited annual financial statements and management's discussion and analysis.
That led the B.C. Securities Commission to lift a cease-trade order that was imposed in mid-July.
On July 10, Core One Labs announced the 100 percent purchase of one company and 25 percent purchase of the nonvoting participating share capital of another company that operated walk-in medical clinics.
"The Company will aim to prove increased efficacy and bioavailability of existing and novel drugs, including psilocybin, with its proprietary delivery methods currently utilized by its CannaStrip technology," it stated at the time.
The company's shares have not been traded since July 10 and currently stand at $0.5325.
COMPASS will go public soon
The world's most famous psychedelics company, COMPASS Pathways plc. has filed a document earlier this month with the U.S. Securities and Exchange Commission announcing an impending initial public offering.
It notes that more than 320 million people suffer from a major depressive disorder.
"Early signals from academic studies, using formulations of psilocybin not developed by us, have shown that psilocybin therapy may have the potential to improve outcomes for patients suffering with depression, with rapid reductions in depression symptoms and effects lasting up to six months, after administration of a single high dose," the document states. "We have developed a proprietary, high-purity polymorphic crystalline formulation of psilocybin, COMP360."