Special Report: Just days after Creso Pharma (ASX:CPH) announced it was entering the global market for psychedelic medicine, Australia’s federal government has announced millions in funding for the potential lifesaving therapeutic.

While Creso almost certainly had no idea the grant funding was coming when it announced it had agreed to acquire Canada-based psychedelic research company Halucenex Life Sciences, it wasn’t completely a coincidence. Interest in psychedelic medicine is exploding as research indicates the drugs can be used safely to treat a range of psychological conditions.

Australian Health Minister Greg Hunt announced the $15 million competitive grant round on Wednesday, saying psychedelics might offer help to the one in four Australians who experience a mental health disorder each year.

“There is now a strong and emerging body of international evidence that shows that substances such as ketamine, psilocybin, and 3-4 methylenedioxymethamphetamine (MDMA), when used in a controlled environment and supported by psychological/ psychiatric care, offer a promising new approach to effectively treating pernicious mental illnesses that are resistant to first-line treatments,” a press release issued by his office said.

Several treatments have been granted “breakthrough therapy” status for the treatment of post-traumatic stress disorder and major depressive disorder by the US Food and Drug Administration, the media release added.

“The early results of trials in Australia and internationally are extremely encouraging,” Hunt said, “but more research is desperately needed before these approaches can be used by psychiatrists outside of controlled clinical trials.”

And that’s exactly what Halucenex is doing.

Creso announced on Wednesday that its acquisition target had appointed True North Clinical Research to begin a Phase 2 clinical trial evaluating psilocybin (“magic mushrooms”) to treat post-traumatic stress disorder (PTSD) in veterans and first responders.

Beginning in June, 18 to 20 patients with treatment-resistant PTSD will be given micro and macro doses of psilocybin over two weeks while being closely monitored. They’ll then be followed up multiple times over the next six months, but initial results from the study should be available within the first months of the trial commencement.

With millions of veterans around the world being diagnosed with PTSD, Halucenex founder and chief executive Bill Fleming says the trial is a major step in the first direction to finding an effective treatment for them.

“Veterans and first responders give so much to society on a daily basis, and we owe it to them to find the most effective treatments possible,” he said.

Fleming will join Creso Pharma’s board of directors once the acquisition closes, assuming shareholders give their approval at Creso’s annual general meeting next month.

Applications for the $15 million in Australian grant funding opened yesterday and are due by July 21.

This article was developed in collaboration with Creso Pharma, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.