When people hear the word “mushroom,” all sorts of thoughts are conjured up, mostly those of the psychedelic nature. It’s somewhat akin to the stigma with cannabis that is being reshaped as people realize the litany of positive therapeutic applications. As a result, look what the cannabis industry is exploding into as investors and consumers alike become better educated.

What should jump to mind with mushrooms is the market opportunity at hand underscored by the medicinal benefits of the fungi supported by centuries of use that have mushrooms as part of early Materia Medica.

The opportunity is not slipping passed The Yield Growth Corp. (CSE: BOSS)(OTCQB: BOSQF), which is moving quickly to build its footprint in the functional food market with a sidebar for developing new products utilizing psilocybin, the psychoactive ingredient in “magic” mushrooms. On Tuesday, the company made its latest move to plant its flag in the market, loading up its subsidiary with more formulas in exchange for millions of dollars in cash and stock.

Mushrooms are Magical (and not just for altering minds)

Mushrooms are complex. They can be life-saving. They can be delicious. They can be poisonous.

There are about 300 species of mushrooms – some with catchy nicknames like Lion’s Mane and Turkey Tails – known to have therapeutic properties. The applications are as diverse as the different types of mushrooms, including immunological, anti-inflammatory, anti-microbial, anti-viral and anti-hypertensive to name just a few. The robust therapeutic profile has led to mushroom-based products for diabetes, liver protection, cardiovascular health, boosting the immune system, cancer (both fighting and preventing) and much, much more that has pharmaceutical companies active in the space.

A big differentiator between mushrooms and cannabis is that cannabis prohibition has kept a lid on clinical research. Mushrooms – all those that don’t contain psilocybin anyway – are completely legal and have been the subject of decades of research where new health benefits continue to be discovered. Historically, the bulk of the research has been conducted in Asia, but in the last 20 years, the Western world and many emerging markets are catching on, lending to the growing library of evidence that mushrooms are a superfood with hundreds of medicinal functions.

The growing awareness is integral to Fortune Business Insights calling for a “steep rise during the forthcoming years” for the functional mushroom market. This is part of a broader functional food market that industry analysts at Research and Markets forecast to grow 8% annually to reach $34.4 billion in the next five years.

Apropos, don’t discount the “magic” mushroom variety and its potential. 2019 has been a big year for psilocybin, with Denver and Oakland becoming the first cities to decriminalize psychedelic mushrooms as a push for legalization gets underway. Fact is that while the federal government classifies cannabis and mushrooms as highly dangerous because of THC and psilocybin, respectively, clinical and anecdotal evidence supports the opposite to be true.

Studies show that psilocybin could provide options where traditional medicines have failed miserably for things like depression, alcohol addiction and many psychological disorders. Armed with research and a fresh $17 million in capital earmarked for studying psychedelics, the venerable experts at Johns Hopkins recently launched the Center for Psychedelic and Consciousness Research.

Attitudes towards cannabis are changing quickly and, one day, the first thought about magic mushrooms won’t be someone “tripping on shrooms,” but rather the valuable role they play in healthcare by filling areas of great unmet medical need.

Yield Growth and Flourish Mushroom Labs: The Names to Know

In the public domain, there is limited competition in the mushroom space. Already entrenched in cannabis and hemp globally with growing sales, Yield Growth recently expanded into mushrooms. After establishing Flourish Mushroom Labs to exclusively focus on the opportunity at hand and acquiring a database of mushroom formulas, Yield Growth has a catalog of recipes covering coffee, teas, elixirs, soups and other edibles. As is becoming evident, Flourish moves at light speed, already developing a mushroom coffee formula that will spearhead the commercial launch of a full product line starting early in 2020.

The scaffolding on which Flourish is being built got stronger this week by the parent and subsidiary striking a deal for well over 100 mushroom concoctions.

"We are positioning Flourish Mushroom Labs to be a key player in the fast growing international functional mushroom market," said Penny White, Yield Growth CEO, in today’s news release.

Per the deal, Yield Growth is licensing 126 formulas based on ancient Ayurvedic medicine to Flourish for use in products infused with functional or magic mushrooms non-exclusively for a 50-year term. The formulas cover a broad spectrum of consumer goods, including skin care, cosmetics, wellness products, food and beverages. The products will be infused with functional mushrooms or psilocybin or psilocin and/or any combination within legal parameters of specific jurisdictions.

The license is global, excluding Canada.

For the rights, Flourish is paying Yield Growth $3.0 million. $1.8 million is payable in Flourish stock (90 million shares valued at 2 cents each) and $1.2 million in cash payable over the next two years.

While Flourish is private at the moment, Yield Growth is moving towards changing that. The parent has already reserved the ticker “MUSH” with the Canadian Securities Exchange in preparation for Flourish entering the public domain.

How quickly this happens affects the terms of the licensing deal. If Flourish is successfully listed on the CSE within 6 months, $200,000 will be deducted from the purchase price. If listed between 6-12 months, $400,000 will be deducted.

Watch for Converging Catalysts

There are a lot of moving parts that look to be coming together here. Going forward, there is will be a growing awareness about the health and wellness benefits of mushrooms. At the same time, Flourish is aligning to launch new mushroom-based products in the coming months and it should be expected that marketing will help with the consumer education process.

As for the particularly exciting – albeit relatively unknown – segment of psychedelic mushrooms, Flourish will quietly be a leader as regulatory changes are considered and implemented. As all this transpires, Flourish will become the first pure-play focused on mushrooms and that, without mentioning all the other corporate dynamics, is reason for investors to looking forward to 2020 and the decades to come.

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