Wuhan Signs LOI with Biodelta One Month after Launching Psilocybin Division

On May 17, 2019, Wuhan General Group (“Wuhan”) announced signing a Letter of Intent (“LOI”) with Biodelta Nutraceuticals, Ltd.  This announcement follows Wuhan’s April 5, 2019 announcement that its wholly-owned subsidiary MJ MedTech, Inc. created a new division (M2BIO) dedicated to exploring opportunities in the psychedelic medicine space.

The LOI between Wuhan and Biodelta calls for Wuhan’s purchasing 49% of Biodelta’s land, buildings, and infrastructure. These assets include but are not limited to:

  • 1.3 million square feet of cultivation space
    • 300,000 sq. ft. of turnkey space
    • 1,000,000 sq ft. of additional space expected by 2021
  • Specialized ISO 22000 processing factory 
  • 8 Industrial GMP compliant dryers
  • Water rights

A full agreement between the parties is expected to be reached in 45 days.

Wuhan’s recent launch of its psilocybin division (M2BIO), coupled with the acquisition of Biodelta’s cultivation resources further illustrates their commitment to developing commercial-scale psilocybin products.

Wuhan General Group Wholly Owns MJMedTech, Which Operates Both Dr. AnnaRx and M2BIO.

Wuhan General Group is a publicly traded Nevada corporation, listed under the ticker WUHN.

According to Wuhan’s webpage, the company is an “alternative medicinal and botanicals company,” focussing on “Tomorrow’s Alternative Medicine” with an “aim to build a great sustainable and equitable portfolio of ventures in the emerging markets through advanced research & development, acquisition, production and services commercialized through our divisions.”

Wuhan operates two divisions through its wholly-owned subsidiary, MJMedTech.

MJ MedTech is a nutraceutical biotechnology company focused on developing and commercializing botanical-based medicine by deploying medical grade CBD and other plant-based products to help alleviate everyday illness.

MJMedTech’s two divisions are as follows: 

  1. Dr. AnnaRX, which focuses on cannabis medicinals, especially CBD products; and
  2. M2BIO which focuses on magic mushroom medicinals, especially psilocybin products.

According to their webpage, Dr. AnnaRx is “committed to supplying medical grade CBD products, superior patient care while increasing shareholders ROI.” The company states that it “on track to achieve a positive cash flow in the second quarter of 2019” and expresses optimism regarding “a new estimate from cannabis industry analysts the Brightfield Group, the CBD market alone could hit $22 billion by 2022.”

MJ MedTech’s new division, M2BIO aims “to develop new therapies that will help patients who suffer from mental illness thereby globally easing the burden on healthcare systems. Towards this goal, M2BIO will be exploring additional indications for psilocybin, with the goal of bringing new therapies to market in the years to come.

M2BIO is led by Wuhan’s CMO, Dr. Anna Morera Lorelta.

According to Dr. Lorelta, psychedelic medicine is experiencing a remarkable revival in the wake of recent research studies and positive findings from great institutions, such as Johns Hopkins. ’’Psilocybin has become a very promising candidate for future treatments for anxiety and depression because it appears to disrupt the sorts of engrained brain activity patterns that are the hallmark of those diseases.” Dr. Lorelta notes “Just like it took time for the regulators to get behind marijuana, we believe the same will happen with ‘magic mushrooms’ in due course.”  See Cannabis and Magic Mushrooms – A Near Perfect Analogy.

MJ MedTech CEO, Jeff Robinson described the company’s strategy as follows: “We want to be far ahead of the curve and become pioneers in the market, collaborating with legislative bodies to help find better and healthier solutions.”

About Biodelta Nutraceuticals, Ltd.

According to Wuhan’s press release, Biodelta Nutraceuticals (ISO 22000 and organic certified) is a Cape Town-based manufacturer and merchandiser of premium health products to all pharmacy & health shop chains across South Africa. For the past 12 years, Biodelta has developed, designed and produced more than 1,000 products and is now strategically positioned to launch CBD products through these channels. In addition, Biodelta has license applications in process for growing, extracting and product development as well as dossiers for various CBD based products.

Indications of an Emerging Psilocybin Industry

For a variety of reasons, research in psychedelics increased tremendously over the past decade.  Owing to many promising scientific results and some indications of legal and political changes, some early movers have started investing in psilocybin, magic mushroom, and psychedelic technology.  This latter activity has been identified as a bold new investment opportunity.

Five years ago, there were no commercial entities working on psilocybin technology.  Now, as of May 2019, there are at least four commercial entities focused on developing psilocybin technology:

  1. COMPASS Pathways (see also ATAI Life Sciences);
  2. CaaMTech; and
  3. M2BIO (see also Wuhan General Group and MJ MedTech).
  4. Paul Stamets.

Non-commercial activity also appears to be gaining momentum.  For example, Business Insider recently published an article about how Tim Ferriss just helped launch the world’s first research center dedicated to turning psychedelics into medicines. “These compounds may help treat intractable conditions affecting tens of millions of people….” Ferris said in a statement. Robin Carhart-Harris, the head of the new center and a neuroscience and pharmacology researcher at London’s Imperial College, told Business Insider, “Things have really started to gain momentum.”

Magic mushrooms were recently decriminalized in Denver, Colorado, suggesting that legal barriers to recreational exploration may decrease alongside the increase in both academic and commercial R&D.

Although the psilocybin industry is still in its nascent stages, all signs suggest that the momentum behind developing psychedelic medicines will continue to grow.  As James Hamblin recently wrote in The Atlantic, “The growth of cannabis is a reminder that once there is money to be made, industries form lobbies in Washington, D.C., and it becomes difficult to contain the profit-driven energies that have put CBD in every conceivable product….”

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