Is TRIP Stock a Good Penny Stock to Buy Amid Russia-Ukraine Conflict?

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Red Light Holland Corp or TRIP stock is a Toronto-based company engaged in producing, cultivating, and selling magic truffles in the legal recreational markets across the Netherlands. Besides, it is also involved in the wholesale trade of products like truffles, cannabis seeds, and other cannabis products. It also trades in microdose packs: A non-synthetic truffle micro-dosing kit, and similar merchandise. All its products are being sold under the brand name of iMicrodose through smart shop operators and an advanced e-commerce platform called iMicrodose.nl.

After going public in 2020, the Red-Light Holland stock reached its all-time high by February 2021. However, soon after, things started going completely downhill for the company and it ended up losing more than 70% of its value over the past year. Presently, the Russia-Ukraine war and rising levels of inflation have already taken a negative toll on the financial markets. TRIP stock is trading near its all-time lows but investing in such penny stocks is very risky. So, is the TRIP stock worth investing in at this time?

Making Natural Medication More Accessible

Red Light Holland is a dealer of psychedelics that focuses on the manufacturing of magic truffles and on micro-dosing them. These are not random truffles one orders on their pasta at fancy restaurants. This means instead of visiting the showrooms, the company’s products can be taken in small doses and just like cannabis these products too would help its users by allowing them to deal with their anxiety, depression, etc. 

Moreover, Red Light Holland is also working towards puffing up its offerings. By the end of last year, it came out with the Maka magic truffles. These newly branded Maka magic truffles come in six varieties namely: Hollandia, Makanaut, Muskoka, Mexicana, Atlantis, and Double Vision and are packaged in an attractive and eye-catching manner too. The said products are being sold B2B in the Netherlands through the company’s wholly-owned subsidiary SR Wholesale and through its own website.

The main idea behind developing these products is the lack of accessibility to healthcare facilities among a huge percentage of the global population. Red Light Holland’s CEO had stated that because there are many people across the world who do not have access to the prescribed medications, including the simple ones like penicillin, a move towards natural medication like psilocybin can be a lot beneficial to the world. The nature of the company’s truffles is such that people will now be able to grow their own natural medications in their own backyards thereby making natural medication extremely accessible to them.

The Acceptability Issue

Studies relating to the effects of magic truffles are still in progress and initially many countries were even sceptical to permit the usage of these recreational psychedelics. But now things have started improving.

The Ontario-based corporation entered into an exclusive distribution agreement with Conor McGregor’s TIDL Sport, an innovative sports recovery line, through its wholly-owned subsidiary SR Wholesale in the Netherlands. As per the said deal, the benefits of exercise science and cryotherapy will be combined to provide relief to the customers from post-exercise pain and soreness and thus enable them to soon return to their daily activities by reducing their pain. Also, both the companies share a similar goal of long-term recovery by focusing on the betterment of both their physical and mental health.

Moreover, even after people’s acceptance of marijuana, the acceptability of the idea of psychedelic mushrooms amongst the masses is still quite challenging. Therefore, other than only manufacturing the truffles, Red Light Holland has to put in sufficient effort towards educating the masses for mitigating the negative stigma around psychedelics

Recently, Red Light Holland submitted a Patent Cooperation Treaty application on the basis of the provisional application, it had filed last year for the purpose of customization and personalization of its micro-dosing kits and the related protocols based on the biometric and movement data. The company intends to use the collected consensual personalized data of its customers to improve their experience while micro-dosing and thereby increase the acceptability of its product amongst the masses in that process.

Are Psychedelics the Next Cannabis?

Psychedelics have the potential to be the next Cannabis. The global psychedelic market is expected to reach $8 billion by 2029 from $2.9 billion in 2021 thereby providing enormous growth opportunities to the market participants. 

As per Red Light Holland’s latest financials for the three-month period ending December 31, 2021, the company has been able to increase its revenues and gross profits by 28% and 48% quarter-over-quarter respectively. So, if the market factors and people’s sentiments remain favorable the company might be able to strengthen its financials even more by grabbing all the incoming opportunities.

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However, due to the Russia-Ukraine war, even some of the biggest psychedelic stocks are losing ground. The Horizon Psychedelic Stock Index ETF (PSYK) has fallen to $2.68 from $4.45 in January 2022 while the Nasdaq Junior Biotechnology Index and Nasdaq Biotechnology Ishares ETF have declined by more than 40% and 24.5% respectively year-to-date. Besides, the broader market has also faded and the Health Care (biotechnology) sector’s performance was also not up to the mark. Therefore, in such a market situation it might be a little difficult for the TRIP stock to reach its desired position. 

The psychedelic market is a booming market and investing in stocks from this industry is worth it. Red Light Holland is a growing company that is striving toward building its worth each passing day. However, it still has a long way to go to establish its position as a leading player in the psychedelic market. Moreover, upon considering the present market conditions including the level of risk associated with the TRIP stock it won’t be a perfect fit for the portfolios of investors who do not have a big risk appetite even though the stock is trading at such a low valuation. 

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