Businesses are betting big on hard drugs

Bad business idea: Opening a meth and crack store that immediately gets shut down. 

Maybe a good business idea? Early investing in the potential decriminalization of hard drugs.

Driving the news: Safe Supply Streaming is on track to list on the Canadian Securities Exchange. But it’s not like other investment firms: It claims to be the first company designed to invest in the “third wave” of drug reform, or policies relaxing laws around hard drugs

  • The company plans to invest in businesses poised to benefit from such reforms, like addiction clinics, fentanyl test-strip producers, and coca-leaf energy drink makers. 

Catch-up: Several Canadian companies are betting big on drug reform and psychedelic therapy. Some have even sought permission from Health Canada to make and sell a variety of hard drugs… strictly for research purposes and only to licenced buyers, like hospitals.  

  • In February, BC-based Lucy Scientific Discovery (or LSD… get it?) said it was looking to expand its licensing to make limited amounts of cocaine and heroin.

  • Filament Health, another BC drug research company, has a dealer’s license for several substances, including cocaine, and just last week raised $2 million

Why it matters: With BC not even a year into its pilot of decriminalizing possession of small amounts of illicit substances, these companies will be bellwethers for the industry's viability.

Yes, but: With BC already scaling back parts of its pilot and similar programs in other countries hitting rough patches, a third wave of drug reform is very far from guaranteed.

Plus: Look no further than Canada’s legalization of marijuana for proof that black markets continue to survive and thrive even if an illicit product becomes legally accessible.—QH