Compensation Warrants: 4,816,802
Red Light Holland is the latest psilocybin company to enter the space, trading 16 million shares on its first day May 29, 2020, closing at 0.175 cents on the CSE. For a new public company, the total number of shares outstanding seems quite high, and we’re told they’ll also be raising money in the near future. But the company’s plans and it’s early entry into a growing psilocybin industry, position it well within a new sector. Red Light Holland has partnered with the largest psychedelic truffle producer who has been creating and distributing psychedelic truffles for many years. Their farm will be led by experienced growers in Holland, which is very important, as the growth of these truffles indoors is a very specific process.
You may be asking, why magic truffles and not mushrooms? Well, mushrooms were actually made illegal in the Netherlands in 2008, but magic truffles, which produce the same psycho-active molecule, was spared from the “illegal” category. Truffles are grown within soil, and not allowed to spawn into mushrooms, and there are not many companies with production licenses in the country.
Red Light has two divisions, the recreational side in Holland, and they’re also starting the medical side. Likely the main growth area for the company is the legal use of psilocybin for microdosing in Holland. Historically, the main use of psilocybin in the Netherlands has been for recreational psychedelic trips, with many customers being foreigners. However, the microdosing movement is expanding worldwide, with medical studies underway. Holland is one of the few places where it is legal to produce and consume psilocybin. TRIP intends to distribute its product through “Smart Shops” who have the license to sell psilocybin truffles in Holland. Other companies seem to focus on psilocybin treatments for depression treatment, which is testing one large, guided dose, but Red Light basically intends to market and distribute the microdoses more like healthy cigarettes, which means recurring revenue. On the medical side, the company cited usage for anti-addiction and anti-depression within Holland, obviously with the intention to expand to other markets if and when psilocybin becomes legalized.
Three notable members of the team that certainly everyone in Canada would recognise are Comedian Russel Peters, Chief Creative Officer, former Radio Host, Todd Shapiro, CEO and Chairman of the Board, and Bruce Linton, Chairman of the Advisory Committee, and former co-founder of Tweed Marijuana. If investors wanted to place an early bet on the company, perhaps the best selling point is that Bruce Linton took Tweed from a low of 0.03 cents in 2013, to a high of $67 during the mania of 2018. If the push towards legalization of psilocybin improves within the next 3-5 years, then certainly, early investors in TRIP should be rewarded, assuming the company is frugal with its cash. It’s worth mentioning, Terry Booth, former CEO of Aurora Cannabis, is also an early investor in this deal.
As with all early stage public companies, many questions remain for Red Light’s future. They do not intend to create synthetic psilocybin, but plan to promote organically grown psilocybin products. Their CEO intends to focus on branding the company in Holland, and if successful, especially if tourism returns, the company could blaze a clear path towards positive cashflow, while other companies focus on a multi-year path of FDA medical approval and therapeutic patents.