Coca Leaf Ventures: Mapping Pharma & Nutraceuticals, Value Chain And Investment Opportunities

Despite the stigma, the coca plant is effectively entering the drug reform movement as part of an expected “third wave of decriminalization” along with other controlled substances including psychedelics. 

Companies are gearing up by specializing in different parts of the value chain, from analytical testing for safe supply, research and innovation on the plant’s different components, to the clinical infrastructure for safe and effective provision of the new treatments.

Benzinga spoke with Ronan Levy, president of Safe Supply Streaming Co., for a deep dive into the topic. See conversation’s Part 1.

Pharma And Nutraceutical Worlds

Levy says the “relaunched” era of the coca leaf plant will bring about both nutraceutical and pharmaceutical products to market. 

Harbor, a Safe Supply-incubated company, imports coca leaf extract into Canada for analysis and exploration into its potential applications in nutraceuticals, food and energy products and supplements, considering its components are not “fully known” to date.

“There are many therapeutic applications of just the coca leaf extract, which is basically coca leaf with the cocaine removed, so it's de-cocainized. That's one area of interest,” Levy said. 

Other companies will likely take the cocaine or other alkaloids and modify them to try and turn them into pharmaceutical products for FDA and Health Canada approval for clinical trials. 

Cocaine’s potential as a stimulant, acting on dopamine and norepinephrine like Adderall and other ADHD medications, is one area of interest, “but also the low-hanging fruit.” 

Meanwhile, other interesting opportunities include helping with altitude sickness and helping the body uptake more oxygen or even gastrointestinal discomfort and disorder applications. “So an active area of exploration, I think, with a lot of incredible potential.” 

Historical Background, Scheduling, & Coca-Cola

For Levy, the coca plant's historical pathway is analogous to that of psychedelics: a renewed excitement around their therapeutic applications, but not much research as yet available.

The scant research opens the door for "a great wealth of discoveries" as he sees it as traditional use dates back thousands of years.

The plant’s alkaloid cocaine is a Schedule II drug in the U.S., “meaning it has a high risk of abuse, but there is a therapeutic application to it.” In Canada it’s a Schedule I drug, so appropriate licenses enable companies and researchers to work with it. 

At the end of the XIX century, Coca-Cola’s original formulations were known to have had coca in them, including cocaine. And to this day, it includes decocainized coca leaf extract in small, small amounts. Meaning the coca leaf extract is available in the U.S. through Coca-Cola.

Once the extract is decocainized, Levy says, there are no real restrictions on use and importation. A potential regulatory extrapolation for other targets?

Safe Supply Or Spanning Across The Drug Ecosystem

Levy says the businesses’ incubator is drug-agnostic, focusing on opportunity and need. This means considering MDMA-assisted therapy’s imminent FDA approval or cannabis in jurisdictions where reform is just beginning.

Fentanyl Crisis 

“One of the results of the War on Drugs is that drug use is at an all-time high -cocaine, cannabis, psychedelics. And we have the most toxic drug supply ever, getting caught with fentanyl and xylazine. So people who are using, whether there's a dependence or recreational, are taking much more significant risks with their lives,” Levy says. 

This brings about new technologies to help people test their supply across more and less progressive jurisdictions, enabling them to be “at least equipped to make informed decisions on what they put into their body instead of taking a chance.” 

For the coca plant, Levy sees opportunities on the supply side: Harbor gets the extract from a government-run company, and the only legal operator and producer of coca leaf in the world. It also has access to the alkaloids (including cocaine.)

“So there'll be opportunities to start drug development work and other clinical trials,” Levy told Benzinga. This includes providing safe cocaine supplies for governments with safe swap programs.   

“The distribution and value chains haven't been fully built yet, but you can start to see the pieces moving into place. That's where the first mover will have lots of opportunity, being ahead of the curve in terms of infrastructure building and identifying the opportunities coming with it,” he added.

Investors

The basic thesis of Safe Supply is to involve investors who want exposure to a diversified platform of companies in the emerging drug ecosystem. Opportunities span across the substances’ spectrum and geography.

Photo: Benzinga edit with photo by Unsplash.