This Nutraceutical Company Stands To Become Leader In A Projected $50B Industry, New Analyst Insights

Irwin Naturals Inc., IWINF a household name in nutraceuticals for nearly nearly 30 years ventured into the cannabis industry with its own CBD line and THC licensing. Now, the company is looking to establish its presence in the psychedelics space as well.

The company's latest move was the acquisition of all issued and outstanding shares of growth clinics agency Keta Media LLC. The deal includes KM's global network's relationships with treatment centers in over 45 states and three countries.

The Analyst

Cantor Fitzgerald analyst Pablo Zuanic initiated coverage on the company stock with an Overweight rating and a Dec. '23 price target of CA$9.62 ($7).

The Thesis

The company plans to have 100 clinics under its banner by the end of next year and provide Ketamine-assisted treatments and other psychedelics-based therapies once the substances become legal on the federal level, Zuanic said in his latest note. Currently, there are roughly 600 behavioral clinics that offer psychedelics-based treatments out of 14,000 across the country, he added.

"Assuming that in the next five years, 15% of the US adult population with a diagnosed mental illness (15% x 25% x 258mn) uses Ketamine-assisted therapy and other psychedelics-based therapy (if legal by then), the market could be worth ~$50Bn (taking an average of $5,000 per patient for the treatment)." 

Moreover, with $100 million in sales for 2021 and products available in over 100,000 shops nationwide, in addition to its CBD business, Irwin continues to bolster the process of licensing the brand for THC in several states where it's legal, such as Michigan, Ohio, Colorado, New Mexico and California, to name a few.

"Based on the TAM potential for the sector, a sector leader in the psychedelics clinics space could be worth $45Bn in five years, as per our estimates," Zuanic said adding that it is not yet clear how the sector will play out.

However, "there is plenty of uncertainty about how this specific sector plays out, and the Irwin roll-up strategy has inherent execution risks," said Zuanic.

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