As the legal cannabis market booms, another class of drugs on the horizon is getting closer to legalization, with its own impending boom coming. And that means a whole new place for investment. So as MDMA, psilocybin, and DMT work their way through medical trials, here’s how to invest in this new medical psychedelics field.
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What are psychedelics?
Psychedelics are a subset of hallucinogenic drugs, which themselves are a subset of psychoactive drugs. Whether made in a lab like LSD, or found in nature like psilocybin or peyote, psychedelics are known for causing ‘trips’. When a person is tripping, they may have altered perceptions of the world around, experience/feel/taste/see/hear things that are not real (hallucinations), feel a heightened sense of connection to those around them, experience euphoria, feel a sense of spirituality and connectedness with the universe, and a greater sense of self-introspection. A large percentage of psychedelics are serotonergic, meaning they effect serotonin receptors in the brain, though they can do this in different ways.
Some drugs like DMT produce short trips of less than an hour in duration. While other drugs like LSD, psilocybin, and mescaline can cause trips that last for many hours, as many as eight or ten. Sometimes people experience bad trips in which negative, or even scary, hallucinations are experienced, and/or a rapid heartbeat, sweating, nausea, disorientation, and fatigue occur. There is indication that the majority of these symptoms can be controlled through proper dosing. In fact, many therapeutic psychedelic users consume the drugs in micro-doses.
All psychedelics are Schedule I in the Convention on Psychotropic Substances, a drug scheduling treaty which defines the legality of different compounds globally. Starting with the Staggers-Dodd bill in 1968 which illegalized LSD and psilocybin, and finishing with the placement in the Convention, making all such substances illegal to buy, sell, or consume, with no purported medical value.
Psychedelics have been used for thousands of years, all throughout the world, though their uses in medicine in the mid-1900’s, and proposed uses today, are generally different than the shamanistic/ritualistic way they were primarily used in history, although this is not to say that there were not traditions that did use psychedelics therapeutically. Technically, if a shaman is consuming ayahuasca to get rid of demons, I suppose that could be thought of as therapeutic anyway.
Medical psychedelics research
Psychedelics, particularly, LSD, were introduced to modern medicine around the 1950’s after Albert Hoffman synthesized the compound in Switzerland in 1938. Several psychotherapists at the time, like Humphry Osmond and Ronald Sandison caught onto the idea, bringing these treatments to England and America. Hoffman conducted, among other research and therapy, the Saskatchewan trials, and ultimately came up with the idea of ‘psychedelic therapy’ in which a single large dose of LSD was given along with therapy sessions.
‘Psycholytic therapy’ is what Ronald Sandison’s version became known as in the UK, with the difference being that Sandison’s treatment style was to do multiple sessions with smaller amounts of the drug that increased through the process. Both doctors found great success particularly with alcohol addiction. How much success? According to the Saskatchewan trials, as many as 40-45% of drinkers were still not drinking a full year after the therapy session.
Unfortunately, when the drugs were made illegal, all ability to continue such treatments ended, and the ability for research into the field was completely stymied, and did not pick up again until much more recently. However, to give an idea of the massive turnaround that has been going on when it comes to psychedelics, consider that the US’s Food & Drug Administration (FDA), singled out both psylocibin in 2019 and MDMA in 2017 as ‘breakthrough therapies’ for depression and PTSD respectively. Such a designation by the FDA is meant to speed up research and development for products deemed necessary for health.
This indicates a desire by a US government agency to not only test these drugs, but to get them to market. And they’re all schedule I right now. One exception to psychedelics all being schedule I, however, is magic mushrooms. Though its psychoactive components like psilocybin are Schedule I, and therefore illegal, the plants themselves are not outlawed, creating a bit of gray area in terms of mushroom use, cultivation, and production. This gray area could prove useful in the future.
What can be expected?
If you’re wondering why this matters, consider how massive – and growing – the legal cannabis markets are. Well, psychedelics offer many of the same medical benefits, especially psychologically, with possibly added abilities in other departments. And they’ve proven to be very safe. As an industry in which much of it is pharmaceutical to begin with, it’s a safe bet that these drugs are going to pick up quickly. Because the pharma world is sure to take a massive interest, it gives even more reason to invest in medical psychedelics now, before everything explodes.
So how much is it worth? I’m not the kind of writer who generally likes to get into these numbers. Every publication makes its own predictions, off its own information, and very rarely do these predictions seem to consider world changes. Whatever the size of the CBD industry was originally predicted to grow to a few years ago, that number would be invalid by now because it didn’t account for THC-based medicines growing in popularity, or legal markets, or psychedelics.
Imagine how much psychedelics could eat away at cannabis revenue. And not only that, any predictions of the future market size for psychedelics would have to take into account the still expanding cannabis markets (with more countries constantly legalizing in some form or another), and the question mark of what currently unforeseen factors could upend the trend a few years down the line. So, I’m not concerned with too many predictor numbers, but here’s just one, in order to get an idea what we’re dealing with.
PRNewswire, citing an analysis by Data Bridge Market Research, explained the forecast for 2020-2027, in which the field is expected to grow to $6.8 billion by 2027. It was worth just over $2 billion in 2019.
Best ways to invest in growing medical psychedelics field
Now that a certain barrier seems to be broken, more companies are conducting clinical trials, getting patents, and starting to get clearances for products. In fact, if you thought the psychedelics market was off limits, you’d be very much mistaken. Not only is this a growing market with a lot of possibility, but companies are already staking their claim, leaving room for you to start investing. So, if you like the idea of getting in on something before it explodes, consider investigating the following companies, and invest in the medical psychedelics field.
Much like with cannabis, Canada is quickly establishing itself as a leader in medical psychedelics, with the top companies coming out of this country. In the first half of 2020, $150 million USD was raised by six different companies: Mind Medicine, COMPASS Pathways, Field Trip Psychedelics, ATAI Life Sciences, Orthogonol Thinker, and Numinous Wellness. Mindmed and Numinous are already publicly listed companies. This is an early stage entry for investors. In fact, to give an idea of how seriously Canada is taking this, the first exchange traded fund – The Horizons Psychedelic Stock Index ETF, made its debut in January. ETF’s are like regular asset exchanges, except that they include a mix of stocks, commodities, and bonds. This exchange is solely for psychedelics.
The CEO of the fund, Steve Hawkins, said that while larger pharmaceutical companies have been admitted to the fund, the idea is to keep it mainly for smaller psychedelics companies. Companies can be added to the fund if they can tick the following boxes: be a part of a regular US or Canada-based stock exchange, be a biotechnology company focusing on medical psychedelic research, be a producer and/or supplier of psychedelic medicines, and be a company that works within the general supply chain for psychedelic medications.
Biggest names so far
When it comes to emerging fields and investing, the majority of people will never get there preemptively, and will instead act by reaction. For anyone who wants to get in on it before the top blows off, the following companies currently provide the best prospect for future growth, expansion, approval, and ability for revenue. These names should be noted, they will likely be bringing you the first approved medical psychedelic products, and for anyone looking to invest in this rapidly growing field of medical psychedelics, they stand out as the best options so far.
Mind Medicine is one of the furthest along when it comes to getting a product out there. It’s a pharmaceutical company that specifically works to develop psychedelic medications. The company is currently in the middle of six different trials on drugs like MDMA, LSD and DMT. In January of 2021, MindMed announced the first ever clinical trials to involve a combination of MDMA and LSD, with company president Dr. Miri Halperin Wernli stating:
“I believe that when LSD and MDMA are taken together they have exceptional potential to open a window into our mind which will awaken it to new levels of awareness by changing the fluidity of the state of consciousness, amplifying changed perceptions, intensifying emotions, and stimulating novel thoughts. It is like a gateway to a multidimensional universe.”
When it comes to MDMA trials, MAPS – Multidisciplinary Association for Psychedelic Studies, is also making its way to approval. MAPS entered phase III of its trials into MDMA for PTSD, and aligned this phase with the FDA according to a Special Protocol Assessment made directly with the FDA. This means that so long as the trials show clinically significant results, the study will already check all FDA regulatory boxes, and make it that much easier for approval.
However, a psychedelic drug has technically already been approved by the FDA. In March of 2019, Johnson & Johnson’s Spravato got approval. The spray treatment is considered for those who have not received a benefit from at least two separate anti-depressants. Spravato is a drug that’s a chemical cousin of the drug ketamine, which is classified as a dissociative drug, but also as a psychedelic. The medication is meant for severe depression.
There are tons of companies popping up. Apart from the companies already listed, prospective investors should check out Champignon Brands, Hollister Biosciences, Better Plant Sciences, Captiva Verde Land, Core One Labs, Cybin, Empower Clinics, Ehave, Jazz pharmaceuticals and EGF Theramed Health. All of these companies are associated in some way or other with the production of psychedelic medications. And while I have yet to see it mentioned in an article, it seems to me that what might upend everything I just said, is the ability to cultivate magic mushrooms.
Something to consider
Much like cannabis, mushrooms come with the ability for easy self-cultivation, as well as large scale cultivation. People who invest in today’s cannabis cultivation already know the value of having growing fields. Imagine the same thing, but with mushrooms. I personally believe that the biggest way in the future to invest in medical psychedelics, will be through the growing of mushrooms.
As stated, this is my opinion, and has not been discussed much as far as I can tell. This is not shocking though, and really doesn’t mean much, as this topic is also an undesirable one for any biotech or pharmaceutical company that – much like with cannabis – would much prefer you know nothing about how to do this on your own. And much like cannabis, it’s easy enough to learn how for anyone who needs some help getting started. Plus, since cultivation and sale of the mushrooms themselves is actually legal in many places, it’s way more legal to grow a field of mushrooms in much of the world, than to grow a field of cannabis.
How to invest in Medical Psychedelics – Conclusion
That the medical psychedelics field is coming is not as much up for debate as many would believe. It might be growing in the shadow of the cannabis market, and being kept quiet until the ability for large scale monetization is possible, but it’s coming, and it will be big. For those who want to invest in the growing medical psychedelics field, getting in now is probably the best idea, and with all the new companies popping up every day, it’s sure to become a heated race very soon.
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Disclaimer: Hi, I’m a researcher and writer. I’m not a medical professional, I have no formal legal education, and I’ve never been to business school. All information in my articles is sourced from other places, which are always referenced, and all opinions stated are mine, and are made clear to be mine. I am not giving anyone advise of any kind, in any capacity. I am more than happy to discuss topics, but should someone have a further question or concern, they should seek guidance from a professional in the relevant field for more information.
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