Two Pot Execs Want To Take Ketamine Mainstream. Not Everybody is Vibing.

Matt and Jackee Stang have come from the world of cannabis to purchase a Phoenix ketamine clinic.
Courtesy of Dwain Schenck
Matt and Jackee Stang have come from the world of cannabis to purchase a Phoenix ketamine clinic.

The ketamine hit Renee Burdge, a 47-year-old mother of three, with a jolt. Like an elevator floor falling out from beneath her.

“It was like a weight, and a drop, and then everything would kind of smooth out into what I would describe as the euphoric experience — which I can't really describe to you because there’s no way to describe it,” she said.

Gone was the chronic pain that had bounded the call center worker's life up to that moment. Instead, as a diluted mixture of saline solution and the anesthetic flowed into her through an IV, words associated with her desire to become a life coach appeared in front of her.

“It was like it was on a Rolodex that kept flipping. It was like: life coach, people, help," Burdge said. "It was all this positive reinforcement I needed."

Over the course of around 90 minutes, the effects began to recede, getting slower and slower as she became aware of her surroundings in a midtown Phoenix clinic: the reclining chair she was sitting in, the blood pressure and oxygen monitors she was hooked up to, and the curtain dividing her from the other patients.

What didn't return was the excruciating pain from her cluster of chronic conditions. After that 2018 appointment, Burdge returned every three weeks over the next two years for more infusions, paying out of pocket until her insurance started covering it. She found she could once again dance and hike — even if just for short distances. And she found another pleasant side effect, her mood was improved for a couple of weeks after each dose, with the music she listened to during her session modulating her feelings for that time.

Burdge is one of a quickly growing number of Americans who are looking to ketamine, a Vietnam War-anesthetic-turned-club-drug, as an experimental treatment for chronic pain and a host of mental health conditions including depression, anxiety, and post-traumatic stress disorder. While the Food and Drug Administration has yet to approve ketamine infusions to treat mood disorders or chronic pain, an increasing body of research shows it can be effective for those that traditional treatments have failed.

For some investors, it may also be a path to fortune in a new and growing industry.

One 2015 article in  AnesthesiologyNews.com estimated that there were about 60 clinics nationally. Three years later, a 2018 article estimated that there were more than 300.

Ketamine Infusion Centers, which operates the midtown clinic, advertised in a press release that it has conducted 4,000 treatments in the last three years, generating more than $1.5 million in revenue.

Advocates Matt and Jackee Stang believe the treatments and recreational use will only grow more popular in coming years — they're finalizing their purchase of Ketamine Infusion Centers this month.

click to enlarge The lobby of the Ketamine Infusion Centers clinic in midtown. - COURTESY OF DWAIN SCHENCK
The lobby of the Ketamine Infusion Centers clinic in midtown.
Courtesy of Dwain Schenck
Jackee Stang discovered ketamine two years ago and it made a big difference in her mental health, helping with her anxiety, her husband Matt Stang told New Times. Now, the couple has founded a business intended to bring psychedelics to the mainstream, applying their experience as cannabis executives to the latest frontier of mind-altering substances.

Their purchase of Ketamine Infusion Centers will give the couple's publicly traded company, Delic, its first two ketamine clinics: one in Phoenix and the other in Bakersfield, California.

Matt Stang sees that as just the beginning. A February 4 company press release advertises that what Delic is really after is Ketamine Infusion Centers' ability to quickly establish new clinics, and Stang told Phoenix New Times he sees Arizona as a prime spot to grow the chain due to the expanding local population.

"We think there is a need for folks with anxiety, depression, PTSD, treatment-resistant depression," he said. "And we think it's a growing market with the pandemic and all the things going on. It's really a huge opportunity for us to help people."

It's a feel-good story Stang has told in numerous recent interviews promoting the brand. "So, it's really about helping people the way that [Jackee]'s been helped," he said in a phone interview facilitated by a public relations consultant last week.

click to enlarge Matt Stang is a former executive at High Times, an (in)famous cannabis magazine. - COURTESY OF DWAIN SCHENCK
Matt Stang is a former executive at High Times, an (in)famous cannabis magazine.
Courtesy of Dwain Schenck
Underneath this good-vibes surface, things are a little more complicated. The couple's starkly capitalist endeavor has harshed some longtime members of the world of psychedelics. Their acquisition of Reality Sandwich, a trusted news site for psychedelic users since cannibalized into a brightly-colored infomercial for psychedelics, was decried by some former contributors and a co-founder even unsuccessfully sued to try and stop the sale.

Faye Sakellaridis, the former managing editor of the site, said it was a place for in-depth exploration of psychedelics and associated culture. That community was lost when the site was sold.

"I think they just saw it as a profitable asset, and that's all they really cared about," she told New Times.

This isn't new territory for Stang. While working as an advertising executive at High Times magazine, former employees told Politico last year, Stang was one of the execs who pushed the countercultural classic in a more profit-driven direction: focusing on events, branding, and a traditionally corporate ethos. His quest for personal profit, though, led him to team up with Kareem "Biggs" Burke to run one of New York City's biggest black market marijuana operations in the 2000s. Stang underwent forfeiture proceedings after his arrest; he pleaded guilty in April 2013 and was sentenced to time served.

Matthew and Jackee Stang worked together at High Times before creating Delic. Besides purchasing the ketamine clinics and Reality Sandwich, they've started a "psychedelic wellness summit" in Los Angeles that costs $299 for general admission for two days, and "The Delic," a lifestyle brand that sells "elixirs" and, among other decor, a $500 fur body pillow in case you want to cuddle on your "Journey." Jackee Stang told the Daily Beast last year that they want to be the "Goop" of psychedelics, referring to Gywneth Paltrow's controversial brand of health lifestyle products.

Matt Stang says this is consumerism in service of a cause.

"What I've seen is that the only way to end the War on Drugs is to weave capitalism, to weave the dominant paradigm of our communities, into these substances," he said. "The only way that you're ever going to go outside of its current counter-cultural, illegal status is to bring in jobs and community and money... So for people who want to argue that it has to be kept outside of that, [that] capitalism is the problem. How did they buy food? How did they pay rent? I would love to understand how they structured their life outside our current dominant paradigm."

click to enlarge A selection of articles on the Reality Sandwich homepage last week. - SCREENSHOT
A selection of articles on the Reality Sandwich homepage last week.
What Stang is describing is already happening in some ways. Just as cannabis has gone from a cottage industry of dealers, stoners, and medical patients to a cutthroat multi-million-dollar business of mergers and acquisitions that singlehandedly funded Arizona's legalization initiative last year, psychedelics could be on the verge of a similar transformation.

Microdosing psychedelics has grown in popularity in Silicon Valley and on Wall Street, and pharmaceutical companies are pouring money into spinning off psychedelic therapy as a treatment for a variety of disorders. In November, the University of Arizona entered a licensing agreement with a pharmaceutical company for a ketamine-based Parkinson's disease treatment.

Stang sees the medical application of psychedelics like ketamine developing in parallel to greater acceptance of, and legal tolerance for, recreational usage as the potential benefits become more clear and supported by research.

"This is not about creating a vast amount of wealth," he said. "This is about helping change the world for the better. You know, I've done a lot of things that are in the cannabis world that are great wealth creation opportunities. For me this is our give back. This is our opportunity to allow people to be part of changing the dominant paradigm around psychedelics to bring psychedelics mainstream."

Courtesy of Dwain Schenck

Ketamine is a good starting point for that effort. Unlike other psychedelics, it's only classified as a Schedule III controlled substance, meaning the DEA recognizes its medical value and it is available to doctors. In 2019, the FDA approved a ketamine nasal spray to treat depression.

“A ketamine clinic isn’t going to have the same issues cannabis does," said Hilary Bricken, Delic's Los Angeles attorney.

Most ketamine clinics operate in a grey area, offering medically supervised transfusions in what is considered an "off-label" use, not originally authorized by the FDA. Perhaps the most famous example of an off-label use is Viagra, which was originally developed as a heart medication — before study participants discovered its other benefits.

While using ketamine to treat mental health issues may be off-label, it doesn't mean it's totally unregulated. The American Psychiatric Association issued general guidelines for the treatment in 2017, and since at least 2015 the Arizona State Board of Nursing has had an official policy allowing registered nurses to administer the treatment, as long as they are properly trained and authorized by a licensed care provider.

That being said, since the treatment is off-label, it carries an increased risk for providers if they face malpractice charges, Bricken said. Owners or investors need to be more engaged in the day-to-day running of clinics to ensure they don't run afoul of the complex web of medical regulations, and some states have strict limits on how much profiteering can be derived from a medical service.

Insurance companies can also balk at covering the expensive treatments, which start at around $375 for each infusion. Longer infusion treatments costing $650 or more. One of the selling points of the Ketamine Infusion Centers is their supposed ability to accept insurance, although their website notes there's no guarantee.

So what happens when a medical treatment becomes a lifestyle choice?

Reality Sandwich's homepage promotes articles for ketamine treatment alongside those about its recreational uses, including one about having sex while using the drug. A 2018 investigation by health news outlet STAT found a lack of uniform procedures across ketamine clinics nationally and that a number were offering expensive treatments without a rigorous medical framework.

Stang draws a distinction between the company's medical side and its psychedelic lifestyle brands. However, it's not so neat. Of the 14 articles on the front page of Reality Sandwich last week, 11 were specifically about ketamine, with five of those focused on ketamine treatment. A company press release advertising the purchase of the ketamine clinics said that they hope to drive users of Delic-owned websites to their clinics. And when asked where interested potential patients should start, Stang also points to the website.

"...we know that in a nascent industry whoever yells the loudest gets the attention," Stang said in the press release. "Our media exposure and expertise is second to none in the industry and we feel like we can give a tremendous amount of attention to [Ketamine Infusion Clinics] and all future companies that join the DELIC ecosystem."

For Burdge, who turned to ketamine to address her chronic pain, none of that was necessary. She was referred to the ketamine clinic by the pain treatment center she was receiving treatment at because nothing else would work. She stopped going to the ketamine clinic a year or so ago due to medical issues that made coordinating appointments difficult, but plans to start again soon.

"The pain management they’ve given [me] hasn’t even come close," she said. "So I think I will be starting back there at the Ketamine clinic."

The increased prominence of ketamine treatment has helped her in one way: her Cigna insurance now covers it.

(Correction: This story has been updated to reflect Hilary Bricken's affiliation with Delic.)