Medicinal cannabis companies are trying to get a foothold in Australia's new psychedelics market, with therapies using MDMA and psilocybin to treat severe mental health conditions permitted from next month.

The Therapeutic Goods Administration (TGA) surprised many in February when it approved the prescribing of MDMA for post-traumatic stress disorder (PTSD) and psilocybin for treatment-resistant depression, with the decision to take effect from July 1.

Only psychiatrists who have been authorised by the TGA and approved by a human research ethics committee will be able to prescribe the medicines.

Eligible patients will only be able to access the medicines in a supervised setting combined with psychotherapy.

It is also anticipated the initial numbers of people who might access the treatments will be very small.

The TGA said its February decision reflected the "current lack of options for patients with specific treatment-resistant mental illnesses" and warned that in order to protect vulnerable patients, the drugs would only be available in highly controlled settings.

While some clinical trials using psychedelics have had promising results, the therapies are not yet considered proven, and even those involved in established Australian clinical trials have called for caution in who can access the treatments and how they are delivered.

Apart from their use in specialised clinical settings, MDMA (the active ingredient in party drugs such as ecstasy) and psilocybin (found in "magic mushrooms") will remain schedule 9 prohibited substances, which limits their use to approved clinical trials. 

Psychedelic drugs to be imported from Canada

Behind the scenes, works are well underway negotiating the logistics of importing medicines previously associated with illicit recreational drug use.

Rodney Cocks is the CEO and co-founder of Vitura Health, an ASX-listed company which operates an online medicinal cannabis platform.

The company is making an early pivot into the psychedelics space.

"Our experience in unregistered medicines and medicinal cannabis is directly relevant to psychedelics … and in the wake of the changes announced in February … we made a strategic choice to move into this area," Mr Cocks said.

The businessman is a former veteran, having served on the counter narcotics team of the British Embassy in Afghanistan.

He said many veterans who served in Iraq and Afghanistan were struggling with PTSD.

"We're really looking forward to getting these therapies into the hands of the most vulnerable in our community, including veterans, first responders, and those who are suffering treatment-resistant depression," he said.

Last month, his company announced a new joint venture called Cortexa with Canadian drug manufacturer PharmAla Biotech Holdings.

Mr Cocks said the medicines produced by PharmaAla were already being used in clinical trials, and it was expected to be able to supply MDMA and psilocybin to a prescription-ready standard in Australia.

"We're expecting to see the first shipments in the coming weeks," he said.

"That puts us in a position where we can get those therapies out to those patients who need them early in that time once the regulation changes on the first of July."

Mr Cocks said the plan was for Cortexa to eventually manufacture MDMA and psilocybin under a licence in Australia.

"We look forward to removing the complexity of the export-import process, and bringing those onshore to manufacture here in Australia, once there is a sufficient scale to do that."

Medicinal cannabis company teams up with health insurer on psychedelic clinic

Little Green Pharma, which describes itself as Australia's first producer and exporter of cannabis medicine, is another company eyeing off the new psychedelics market, through its subsidiary Reset Mind Sciences.

When the TGA decision was announced, Reset Mind Sciences had already spent years preparing for a Perth-based clinical trial using psilocybin for treatment-resistant depression.

Reset Mind Sciences CEO Shaun Duffy said part of his interest in psychedelics was due to his wife's experience of depression.

"We embarked on setting up the first psilocybin-based clinical trial in Western Australia, which got ethics approval earlier this year and is getting close to patient recruitment now," the former consultant said.

Mr Duffy said his company eventually wanted to produce pharmaceutical-grade psilocybin, from mushrooms, in Australia.

But it is also looking at expanding into the clinical side of things through a partnership with a health insurer.

In March, Reset announced a deal with Health Insurance Fund of Australia (HIF), to establish a mental healthcare facility offering psychedelic-assisted therapies, with the insurer contributing $250,000 to set up the centre.

The facility will borrow therapeutic practices being tested at the Perth clinical trial, even though the results of the trial may still be a year away.

HIF will also undertake a health economics study at the clinic to understand the role of insurers in funding these treatments in future.

Mr Duffy said he was unable to discuss in detail exactly what services may be on offer post-July 1, due to TGA restrictions on advertising, but said the partnership with the insurance industry was crucial.

"We've always been of the view from the start that the best way to broaden public access to psychedelics is to get the health insurance industry involved."

Cost estimates for treatment still in the tens of thousands

Drug developer Incannex Healthcare Limited is another player looking to establish multiple psychedelic-assisted psychotherapy clinics in Australia, and eventually, overseas.

It has already signed a lease on its first Melbourne clinic, in Abbotsford, in collaboration with three psychiatrists who have been involved with clinical trials at Monash University, which is expected to open later this year.

In an announcement to the ASX, Incannex suggested the estimated Australian market for psychedelic-assisted psychotherapy was anticipated to be more than $2 billion per annum, and globally, closer to $60 billion.

Peter Widdows, who is leading the clinic project for Incannex, said there were roughly 390,000 Australians with PTSD and 280,000 suffering from treatment-resistant depression.

He said access to treatment in the early stages would be restricted due to the small number of doctors with relevant experience in providing treatment, but also due to the price — which he said would likely be around the $20,000 mark.

"This type of treatment is a long treatment over a number of months."

Other health insurers eye changes with caution

Some of Australia's major health insurers were hesitant to say if their customers could be insured for the significant costs of psychedelic treatments.

Medibank, Australia's largest health insurer, did not say if its members could be covered.

"This is an emerging area in healthcare and we continue to look into this as a potential treatment for Australians," a spokesperson for Medibank said.

A spokesperson for Bupa said coverage would depend on member "policy and the circumstances of their treatment".

HBF said the therapies were not well established and the insurer would monitor developments in the space.

"HBF will wait for further detail as to exactly how the medications will be classified and prescribed before making a decision on whether benefits will apply for our members," a spokesperson said.

Insurer NIB said its members could be covered for non-subsidised pharmaceuticals that meet certain criteria, as well as psychology services.