Overview

Fungtional Labs is a leading provider of cultivation supplies and food-grade functional mushrooms in North America. The market for food-grade functional mushrooms is estimated to be $69 billion in 2024, with growth being driven by restaurants, wholesalers and supplement manufacturers seeking raw materials. The high demand coupled with short supply of mushrooms such as lion’s mane and oysters provides an opportunity for Fungtional Labs to capture market share in this large and growing market.

The company’s vertically integrated business model, from cultivation and extraction to testing and end-product sales and distribution, provides robust differentiation over its peers. Fungtional Labs’ cultivation supplies based on its proprietary all-in-one growing media include sterilized media, spawn genetics, all-in-one grow bags, pellets and masters mix. The company’s long-term goal is to develop IP around functional and psychedelic mushroom extracts.

The company plans to implement its business model over three phases – Phase 1 will focus on providing mycological supplies and producing functional mushroom varieties; Phase 2 will focus on processing finished products, as well as submitting a licensed dealer application to manufacture psilocybin-enhanced products; and Phase 3 will involve providing white labeling service of our products and operating as a licensed dealer in the psychedelics market.

Phase 1 – Functional Growing Centre

Under Phase 1, the company aims to produce high-quality gourmet and functional mushroom varieties, provide mycological supplies, and offer consulting services. The company’s new 5,000 sq. ft. facility in Nevada compliments the transition of our Canada facility to direct fulfillment. The new facility will focus on the production of growing media and all-in-one grow bags, to empower cultivators to grow their mushrooms. The growing media and all-in-one grow bags are designed to be user-friendly and accessible to all levels of growers, from beginners to experts.

Phase 2 – Processing Finished Products and Licensed Dealer Application

Phase 2 will focus on processing finished products, as well as, submitting a licensed dealer application to manufacture psilocybin-enhanced products and expand the reach of its growing media and food mushroom production. The company plans to boost the production of its organic masters mix which has gained popularity among mushroom cultivators in North America. Concurrently, the plan is to build an in-house sales team that can increase the reach of its products across North America. Currently, the company is supplying growing media to two major cultivators in the US.

Phase 3 – White Label Services and Licensed Dealer

Phase 3 will involve B2B white labelling services, as well as, operating as a licensed dealer in the psychedelics market. The goal is to develop IP around functional and psychedelic mushroom extracts. These psilocybin extracts and products will be GMP-grade, can be prescribed by North American doctors, and can be sold through pharmacies and clinics. The psychedelic market presents a large opportunity for the company given that the market is projected to grow at a CAGR of 16.3 percent by 2027.