Psychedelic Water to raise a funding round

Psychedelic Water, the Toronto-based functional beverage company, is looking to raise a funding round of between $3 million and $5 million and is in discussions with investment banks, its CEO Pankaj Gogia tells Axios.

Why it matters: The global functional beverage market is forecasted to grow to almost $266 billion by 2030, from nearly $119 billion in 2021, according to market research provider InsightAce Analytic.

Of note: Keith Stein, who founded Psychedelic Water, is a Canadian lawyer by trade who started off in the cannabis business before launching Psychedelic Water.

Details: The startup is building a brand that, if and when it is legally allowed, will make products that incorporate psilocybin, the active ingredient found in psychedelic or “magic” mushrooms.

• Psychedelics are considered "cannabis 2.0," said Ben Rogul, the company's director of marketing.
• "A big part of what we’re doing is, as legal reform happens, we will be the first company to launch a legal product," he said.
• For now, the drinks contain ingredients such as kava root, damiana leaf and green tea, which the company claims are mood-boosting.

By the numbers: The company initially raised a seed round of $1 million and then added to that a Series A of $3.5 million to $4 million, Rogul said.

• In 2021, in less than a year's time, revenue was more than $2 million and is expected to grow to around $5.5 million this year, he said.

What's next: "We basically own the word psychedelic," Rogul said, referring to trademarks, particularly for product categories such as cookies, brownies and energy drinks, among other items.

• It is unveiling a beverage that will contain actual mushrooms, Lion's Mane to be exact, that are purported to have health benefits, just not the "magic" kind.

The bottom line: "People want a natural therapy that will help them ease their stress," Rogul said.