How to Invest in Private Canadian Psychedelic Companies

There is plenty of discussion and resources regarding how one should go about investing in public psychedelic stocks. This is especially true in Canada, where companies like Entheon Biomedical (CSE: ENBI), Field Trip (CSE: FTRP), and HAVN Life Sciences (CSE: HAVN) are catching the attention of investors at large. Indeed, there are plenty of public canadian psychedelic companies for one to invest in – but what about all the private psychedelic companies making recent headlines?

For example, the private Canadian psychedelic company Psygen is quickly gaining notoriety in the emerging psychedelic space, but they are not publicly traded. And yet, like several other private psychedelic companies, they continue to have successful private fundraising rounds from investors. This piece serves to demonstrate three ways one could invest in a private Canadian psychedelic company, which could be an incredibly lucrative position given the current direction of this industry. Of the three avenues of investing listed, we are especially keen on avenue two – a method that both allows individuals to invest in private companies and helps build a sense of community in the emerging psychedelic medicine scene.

how to invest in canadian private psychedelic companies

Avenue One of Private Investing: Become an Accredited Investor

Becoming an accredited investor is a simple concept, but a difficult reality to achieve. An accredited investor is an individual/entity/financial institution with a special financial status that enables them to invest in opportunities not yet available to ordinary investors. How does one gain that special status? They become wealthy.

Yes, an accredited investor is simply someone with a high enough income to participate in hedge fund, venture capital, and angel investment opportunities. According to QuickBooks, the following are common scenarios that deem someone an accredited investor in Canada:

  • An individual, alone or with a spouse, who has net assets of more than $5 million
  • An individual who has a before tax income of over $200,000 for at least two years in a row ($300,000 if combining income with a spouse) and expects to exceed that income the current calendar year
  • A person registered in Canada, under securities legislation, as a dealer or an adviser

The idea here is that if someone is exceptionally wealthy, they are indeed financially literate enough to take on significant financial risk. A certain financial acumen may be assumed, but the status is entirely based on one’s wealth. For this reason, this avenue of private investing is not easily attainable to the average person. However, the following two avenues discussed below are attainable to any willing, interested, average investor in the space.

how to invest in canadian private psychedelic companies

Avenue Two of Private Investing: The F&F Exemption

Perhaps the most important avenue of private psychedelic investing is taking advantage of the family and friends exemption. While you cannot choose your family members, you can absolutely choose who you associate with. On a regular basis, interested investors, psychedelic company CEOs and representatives, researchers and other stakeholders come together at Psychedelic Capital – Microdose’s signature virtual conference regarding clinical, research, and investment opportunities. PsyCap uniquely allows individuals from all walks of life to network with movershakers in psychedelic medicine.

Beyond networking with like minded individuals, investors may learn which companies to invest in, why, and new developments in psychedelic medicine. Just last month, hundreds of attendees heard from MagicMed Industries, Algernon Pharmaceuticals Inc., and Lobe Sciences about a variety of relevant topics pertaining to psychedelics.

These PsyCap events are a hub of insider knowledge. Of course, with that being said, it inherently allows individuals to become insiders. By befriending the representatives of private psychedelic companies – who are riddled at these events for obvious reasons – one can secure a path to becoming an investor themselves.

It pays to be early to the scene. Investing in companies during private rounds will be especially rewarding when said companies eventually go public. And above all, you are putting your money towards a cause that will help alleviate an unprecedented mental health crisis. Become a better educated psychedelic investor today.

Interested in networking with individuals in the psychedelic medicine industry? Want to learn more about investment opportunities, the top psychedelic companies, and latest IPOs and development news? Grab your ticket to the next Psychedelic Capital event!

how to invest in canadian private psychedelic companies

4Avenue Three of Private Investing: Crowdsourcing Funds

The last avenue that investors can utilize to get involved in early funding rounds in private psychedelic companies are crowdfunding campaigns. All private psychedelic companies starting a funding round will clearly vocalize their campaigns. While this avenue is still very high risk (like the others), the stakes are relatively low (caps are generally around $2,500). Also known as equity crowdfunding, this method allows startups and private companies alike to raise capital from the crowd through the sale of securities, such as equity, debt, revenue share and more. Unlike the first avenue of becoming an accredited investor, which requires one to be wealthy to get involved, anyone, regardless of wealth, can precipitate in crowdfunding campaigns launched by private psychedelic companies. 

To get the latest updates about crowdfunding campaigns in the psychedelic sector, stay tuned to Microdose. You can subscribe to our biweekly financial newsletter to get price movements, major highlights in the sector, notifications about crowdfunding campaigns held by private psychedelic companies and much more. Subscribe to the Microdose Market Insights Report and become a more knowledgeable psychedelic investor.

how to invest in canadian private psychedelic companies

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Microdose Psychedelic Insights

Your Guide to the Business of Psychedelics. Our mission is to shift the world's perception of psychedelic medicine.