Delic Holdings Corp., which trades on the Canadian Stock Exchange, has long had its eye on increasing its footprint in the American psychedelic wellness market. Last September, the company did just that by announcing its intention to purchase Ketamine Wellness Centers Arizona LLC (KWC) for a total of $10 million.
The deal exponentially enlarged the stateside presence of Canadian-based Delic, adding 10 KWC clinics into its fold that stretch across Arizona, Colorado, Florida, Illinois, Minnesota, Nevada, Texas, Utah and Washington state. For 2021, KWC was projected to earn $4.5 million, which would boost Delic’s own pro forma annualized revenue to over $8 million.
Delic – which is headquartered in Vancouver and trades over the counter in the States – has a market capitalization hovering between US$6-8 million. With the merger having closed in November, Delic is now the largest psychedelic wellness chain in the nation, and is looking to capitalize even more in an American psychedelic drug market which some estimates have growing to $10.75 billion by 2027.
Along with the newly-acquired KWC clinics, Delic is planning to add 15 more American centers over the next 18 months and has its sights set on branching out into other treatment areas of psychedelic wellness.
The jury is still out in various quarters of the medical community about the efficacy and safety of ketamine treatments, and insurers generally shy away from covering them. However, Delic founder and CEO Matt Stang says his company is the real deal, backed by quality treatment practices with a focus on patient affordability and accessibility. And to those ends, the newly-acquired KWC established a partnership in October with the Community Cares Network of the U.S. Department of Veterans Affairs to provide free ketamine treatments to veterans at clinics in Illinois and Minnesota.
Stang talked with Behavioral Health Business about Delic’s plans for the American psychedelic wellness market, why he believes ketamine is the future of behavioral health treatment and more. Portions of this interview have been edited for length and clarity.
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BHB: What is it like to be one of the small number of psychedelic wellness operators in the U.S.?
Stang: It’s really an incredible time and an incredible opportunity. As the largest chain of ketamine vendors in America, we really have a footprint that allows people to see the future of mental health.
If you are currently working in behavioral health, if you look over at what’s happening in psychedelic wellness with ketamine right now — with MDMA and psilocybin close behind — there’s just incredible efficacy. It’s just so heartening.
I get these emails from patients who have written in to thank us for the work we’ve done, saying, “My life has changed, my pain has gone away, my world is brighter.” It’s amazing to be able to be a part of helping people change their lives.
What is the customer experience like from the moment a client walks into a Delic clinic?
Most of the people have been pre-screened. We have a team that speaks to them on the phone when they express interest about coming in, and we have a doctor that speaks with them to make sure that they’re a good candidate for ketamine therapy. If you’re walking in the door, you’ve almost certainly been pre-screened and have spoken to a medical professional who decided that this standard of care is of benefit to you.
When you come in, you will sit down, talk to our front desk person, and then go into a room with one of our practitioners. You’ll see a medical professional who will take your vitals and make sure that you’re in good shape. You’ll have an intravenous injection, you’re put into a lovely room with a big soft chair, low lighting and music, and you experience ketamine therapy.
It’s about 15 minutes for it to really get started. It lasts for about 45 minutes, and then you’ve got about 20 to 30 minutes of recovery time, after which time there’s someone who sits in there with you to help process the experience. Then you have someone drive you home. People walk out of the experience perfectly fine, but you have to make sure that they don’t drive heavy machinery after going through a profound experience.
In your opinion, how might Delic stand apart from other ketamine operators in the space?
We’re the largest in the country. Half of the population of America should be within 30 minutes of one of our clinics by the end of next year, so we’re really focused on being everywhere people need to be to get their clinical services.
We’ve done 85,000 infusions across our two different practices. And KWC just did a deal with the Veterans Affairs hospitals to help veterans with PTSD. We’re trusted, and we’ve built out an incredibly strong [standard operating procedure] and great doctoral care. This is not even the first inning of this. We’re at such an early point, and we’re going to be a large player in the space.
As far as the licensure of those workers administering ketamine infusions to individuals, how does that work?
Everything is accredited. There is a supervisory doctor that handles every clinic, and there is on-site either a nurse practitioner or registered nurse. We’re in a bunch of different states with different regulations around who and what type of license is required for the administration. So in each state, we have the proper person to actually administer and supervise administration.
Can you provide some insight on Delic’s research and development work?
We own Delic Labs in Vancouver, which has licensure from Health Canada [the country’s health policy department] for doing cannabis, hemp and psychedelic research. We’re doing interesting and novel research in Vancouver around different compounds and different modalities for ourselves, and we’re an outsourced contract research organization for other companies. We have probably 20 clients that contract our lab to do this work.
We’re doing our own [intellectual property] development, obviously, because IP is valuable. We don’t always discuss what we’re doing and go forward until we’ve already protected it, and then we announce it. A lot of great work has been done up there.
Are there any challenges Delic faces given that it is aligned with the psychedelic wellness industry, which currently faces a high level of regulatory scrutiny?
We’ve really put together a great team and an incredible [standard operating procedure] on how to treat people. We have 12 clinics and are focused on making ketamine accessible for the masses who have these mental health challenges and don’t have a good solution. That’s a big part of what we’re doing, which is focusing on making sure that those solutions are accessible to everyone in this country.
Ketamine is FDA-approved and determined to be safe. Looking at ketamine now, as well as psilocybin, MDMA and other novel compounds in the future, I think it’s going to change the face of behavioral health really.
Is Delic looking to expand into other psychedelic wellness treatment areas such as psilocybin and MDMA?
Absolutely. We think we can be molecule agnostic, so we’re building our practice around ketamine, because right now that is the only FDA-approved psychedelic substance. As MDMA and psilocybin and other novel compounds come down, they’re going to need special clinical places where people can come get treated with them. What we’re building is a large chain of specialty clinics that deal with psychedelic wellness.
In announcing the merger with KWC, Delic talked of how it would help facilitate the company’s growth and expansion goals. Can you provide some insight on that?
The main factor we see with our expansion is not going after L.A. or New York, or the giant media markets that require a ton of super high-end office space and a really high price tag for people to come and see you. We’re going after the markets that are still very large cities, but have a good cost of living and are accessible with a broader swath of people.
We don’t want just the 1% to come to our clinic, we want this to be accessible to everyone. We’re in cities that are big and that have a large group of folks who need this service, but can’t afford some outrageous pricing in a big city. That’s been our focus in just really making it accessible.
The KWC merger has added seven clinics to the Delic fold. Do you think that this has helped Delic scale up its business model? If not, what does scale look like to you?
I would say that we have achieved some amount of scale. But next year when we’re at 27 or 30 of these clinics, that will feel like truly a level of scale. Being able to be within a 30-minute drive of half the population will really allow us to market the company nationally.
Would you consider Delic a niche health business, or do you have ambitions of it being mainstreamed?
We are right now niche, and I think we will be mainstream in the next three to five years. I think that the science is there.
The vast majority of the people that I spoke to are just so blown away by the statistics and the fact that you have people who are getting statistically better, who are being statistically cured for psychological difficulties. Once people see the change that [psychedelics] will give and has given people, and once people see the statistics, there’s no going back.
Psychedelics are often lampooned in popular culture as means of “turning on, tuning in and dropping out.” Is it a challenge to overcome that and place psychedelics in a light different from where it tends to stand in popular culture?
Do I think that figures like Timothy Leary and the Grateful Dead helped and hurt at the same time? Sure. The iconic vision of the hippie dropping acid and tuning out is probably what put psychedelic medicine on the back burner for 40 years.
I think the reframing and the rebranding of psychedelics from being a means to disappear from society to a means to better reintegrate yourself in society is a seismic change, and has really taken hold in the last five or 10 years. I do think there’s a long way to go, but I think that the tidal wave of change has come and you’ll see it more and more over the next couple of years with normal folks. That change is absolutely fundamental.
Delic is based in Vancouver but operates clinics only in the U.S. What is the reason for that incorporation arrangement?
I would say it really has to do with the public market. The public markets in Canada are where we’re listed.
A small number of psychedelic wellness providers in the U.S. trade on the Nasdaq. In the future, Would Delic consider listing on the Nasdaq or the New York Stock Exchange as a way to raise more capital or gain more exposure stateside?
We’re always open to all possibilities and we’re very bullish on the fact that this will be transformative for health care. All options are open.
In addition to new clinics and spreading the word about ketamine, what goals are on Delic’s long term horizon?
We really just want to help people. For me, this is an incredibly personal mission. My wife has an anxiety disorder, and we found ketamine therapy three years ago. It’s changed her life and my life for the better immeasurably, and so if we can help even one family go through the same thing, I feel like I’ve achieved my goals.