Minnesota cannabis firm expands to research psychedelic medicines

Vireo Health International, a producer of cannabis products based in Minneapolis, renamed itself Goodness Growth Holdings and said Wednesday it will begin research in psychedelic medicine.

Executives also gave an upbeat outlook for the company's growth. Its shares, which are traded on the Toronto Stock Exchange and over the counter in the U.S., rose 1.7%.

The company — led by Dr. Kyle Kingsley, a former Twin Cities emergency room doctor disillusioned that much of his work involved abuse of prescription drugs and alcohol — is one of America's leading growers and retailers of cannabis products for medical and recreational purposes.

Minnesota, New York, Arizona and other states allow cannabis use for treating pain, anxiety, depression and other conditions.

The company will continue to use the name Vireo for its flagship brand of cannabis products.

The Goodness Growth name reflects "a much more expansive view of our future and clearly differentiates our plant-touching assets from our science and [intellectual property] incubator," Kingsley told investors and analysts Wednesday morning.

The company's biosciences subsidiary, called Resurgent, will conduct clinical research on psychedelics but will not cultivate, manufacture or distribute such drugs.

"We believe the opportunities for psychedelics to transform the future of mental health and psychiatry are far too significant for us to ignore," Kingsley added.

In an interview Tuesday, Kingsley said his team is following research into promising results by the Johns Hopkins University School of Medicine and others into the use of mushroom derivatives.

Goodness Growth will partner with medical institutions on psychedelics, just as it has for several years on developing its brand-name cannabis products, including packaging technology and vaporizers.

Goodness Growth executives said they expect to more than double revenue in 2022 to up to $180 million. And they expect to generate positive cash flow from operations during the first half of next year. For full-year 2022, they expect an operating profit of $35 million to $55 million.

Kingsley said that the company, with 450 employees in eight states working on research to cultivation to sales, will invest up to $20 million through 2022 on continued expansion of its Green Goods retail dispensaries and growing operations.