Proactive Investors - Governments around the world are pivoting away from a prohibition approach to the street-level drug trade in order to mitigate the harm related to its often toxic supply.
Safe Supply Streaming Co Ltd (CSE:SPLY, OTC:SSPLF) was founded two and a half years ago in response to the opportunity presented by the burgeoning safe supply ecosystem. Its goal is to help end the opioid crisis, which claims the lives of 21 people in Canada every day.
Bill Panagiotakopoulos, CEO, told Proactive that the company sees tremendous promise in what he calls the “third wave of drug reform,” projected to be a US$360 billion–plus total addressable market.
The "Third Wave" of drug reform
This “third wave” follows cannabis, which was legalized for recreational use in Canada in October 2018, and then psychedelics, which have shown promise in clinical trials as potential treatments for a range of physical and mental health conditions.
“People, politicians and regulators are waking up to the fact that ‘The War on Drugs’ is a failed policy,” Panagiotakopoulos explains. “It’s cost us as a society over $1 trillion, millions of lives and left us with a highly toxic drug supply.”
Safe Supply Streaming believes that as more jurisdictions decriminalize and legalize psychoactive compounds and other drugs, new opportunities will emerge. As such, it acts like a venture studio and invests in and incubates companies positioned to play a pivotal role in the safe supply space.
The company’s streaming model allows institutional and retail investors alike unique access to up-and-coming companies in the safe supply environment.
“We’re going out and identifying companies, in most cases startups, and looking to see which ones are going to win. Being really early investors, we are giving our shareholders the first mover advantage,” Panagiotakopoulos says.
In some cases, Safe Supply Streaming can offer investors the ability to own a stake in these companies before they reach the capital markets. “That’s something not traditionally available to your average investor,” he notes.
Diverse investments
Panagiotakopoulos says the company is looking at the entire safe supply space and placing bets on a diverse range of entities.
The company’s initial investment is in a business at the forefront of ensuring the safety of drugs: London, Ontario–based CannaLabs. The laboratory services company is researching a range of psychoactive compounds, including MDMA and DMT, and is Health Canada–licensed to conduct analytics and testing for compounds both imported and made in Canada to support safe supply programs.
Safe Supply Streaming also has a pipeline of other candidates that it expects will lead to the expansion of its portfolio in the next six to 12 months.
“There’s so much going on in the third wave of drug reform,” says Panagiotakopoulos, pointing to fentanyl test strips as an example of the type of safe supply product or service the company would look to invest in.
Fentanyl test strips are small strips of paper that can detect the presence of fentanyl, a synthetic opioid 50 times stronger than heroin and 100 times stronger than morphine. It is also a major cause of overdoses and often shows up in MDMA, cocaine and other street drugs.
Until recently, fentanyl test strips were considered to be drug paraphernalia in the United States. But they can serve as an important tool in preventing opioid-related deaths. In Canada, 81% of apparent opioid toxicity deaths between January and March of 2023 involved fentanyl, up 42% since 2016, according to the Public Health Agency of Canada.
The market for fentanyl test strips is expected to reach US$12.64 billion by 2030 and $6.77 billion in the United States alone by 2027.
Safe Supply Streaming is also exploring opportunities around new uses of the coca plant – known for its psychoactive alkaloid cocaine – such as in energy drinks, functional foods and pharmaceuticals.
An experieced team
Safe Supply Streaming’s leadership team features former executives from across the cannabis and psychedelics industries, as well as finance
professionals who have the experience and knowledge required to make informed investments in the safe supply ecosystem.
Collectively, the members of Safe Supply Streaming’s team have raised and deployed more than C$3.5 billion in capital during their careers and created more than $10 billion in shareholder value.
Panagiotakopoulos believes it is important that the company be led by professionals who have worked in the drug ecosystem and have a deep understanding of its rules and regulations. Still, he says it isn’t easy to pick winners when it comes to cannabis and psychedelics investments.
“The best people to deal with these types of investments are those who have spent significant time in the cannabis world through its scheduling and ultimate legislation here in Canada or who have navigated the complex legal framework of having a ketamine clinic or conducting clinical trials of psilocybin to treat various ailments,” Panagiotakopoulos explains.
Safe Supply Streaming’s President is Ronan Levy, who has 15 years of capital markets experience building cannabis and psychedelics companies.
Levy co-founded and was Executive Chairman of Reunion Neurosciences, served as Chairman and Chief Executive Officer of Field Trip Health & Wellness and founded Canadian Cannabis Clinics and CanvasRx, which were both acquired by Aurora Cannabis (TSX:ACB) in 2016.
Setti Coscarella, Vice President of Corporate Development, worked as lead strategist of reduced-risk products at tobacco giant Philip Morris (NYSE:PM). Panagiotakopoulos notes that Coscarella’s experience in the highly regulated tobacco industry is important, in addition to his consumer packaged goods expertise.
The CEO himself brings around a decade of experience working in Canada’s cannabis sector, including participating in roundtables with Health Canada to shape the country’s licensing regime.
Among Safe Supply Streaming’s advisors are Aaron Sonshine, a partner at leading law firm Bennett Jones, and Michael Astone, a former managing director at Cantor Fitzgerald and current Chief Executive Officer of ArcStone Securities and Investments.
“You can have the right thesis but the wrong timing or the right timing but the wrong company – we’ve mitigated those risks,” Panagiotakopoulos says.
“We’re at the right time, which is early on, and the right sector, which we believe is going to be big.”
"Hyper-focused"
Safe Supply Streaming listed on the Canadian Securities Exchange in October, as well as on the Frankfurt Stock Exchange under the ticker QM4, and is working toward an OTC listing in the United States.
“We didn’t wait another two years until we were at a different valuation, and this allows everybody to make that investment with us,” Panagiotakopoulos says.
“We are hyper-focused on where the market is going to be in the next three to five years, and we’re making our bets. The fact that we’re publicly traded allows everybody to make those bets along with us.