Interest in weed stocks are declining from investors and are being replaced by interest in psychedelics stocks. Some investors might feel like they missed out on the early boom for marijuana stocks. Don’t worry — the cannabis industry still has plenty of room to grow.
If you really like getting in on the ground floor of a hot new market, though, there’s another angle you might want to explore, psychedelics stocks.
Breakthrough opportunity for psychedelic stocks
Psychedelics has been in recreational use illegally for a long time. The potential use of hallucinogens like LSD for medical situations have attracted scientific attention over the last century.
The focus today is on psilocybin which is a psychoactive chemical found in certain types of mushrooms. Psilocybin and cannabis are both currently a Schedule 1 substance under the Controlled Substances Act.
Being under this act makes it illegal in the U.S. at the federal level, but now times are changing. Right now, scientific researchers are exploring the use of psilocybin as a treatment option for multiple disorders including major depressive disorder, panic disorder and opioid addiction — these are just a few.
As with marijuana, there’s already a thriving black market for psychedelics that speaks to their popularity. And attitudes are changing, thanks in part to Michael Pollan’s 2018 book on micro-dosing and a designation from the Food and Drug Administration the same year that fast-tracked a psilocybin-based treatment for depression from Compass Pathways based on preliminary clinical evidence. Investors noticed. When Compass, also backed by Thiel, went public this September, its shares jumped 71% in the first day of trading.
Another similarity: Dozens of psychedelics companies have gone public just like early cannabis companies did — in Canada using reverse takeovers, mostly of mining companies. Around 25 companies on the Canadian Stock Exchange are in the psychedelics business, according to the exchange. While such substances are federally illegal in Canada, companies can seek government authority for research, and a recent citizen’s petition has called to decriminalize so-called “entheogenic” or spiritual, plants and fungi, citing their potential for therapy and personal growth.
While cannabis is chasing widespread recreational use — a path that hinges more on changes to the federal laws — the narrower medical path that most psychedelics companies are taking makes investing in them more like investing in biotech, said Simeon Schnapper. His JLS Fund has invested around $10 million in 12 psychedelics companies and is currently raising another $50 million.
The long history of indigenous and black market use make it easier to predict success compared to novel drugs, he said. “Sometimes there’s a drug where indigenous forest cultures have been using it for centuries. We know these molecules can work. We just need to get them through FDA trials.”
Companies you should add to your watchlist
There are serveral companies developing psyhedelic drugs, but most are small players now, here’s a list of who you should be eyeing:
- Compass Pathways (CMPS) – Biggest in the group.
- Mind Medicine / Mind Med (MMEDF) – Soon to move forward with Phase 2a study and soon to be uplisted on NASDAQ anticipating huge upsurge.
- Champignon Brands
- Hollister Biosciences
Bottom line
Psychedelic stocks won’t have as big of a market opportunity as cannabis stocks do. Cannabis is legal nationally in Canada and is legal in some form in 35 U.S. states. Psychedelic drugs are much more heavily restricted. The companies with the greatest opportunities in the psychedelic market are pursuing the FDA approval path, similar to what GW Pharmaceuticals did with its CBD drug Epidiolex.
However, it’s still really early. For investors seeking the next big thing before it becomes the next big thing, the psychedelic drug market appears to be one to check out.
Investor Genius Releases New Magic Mushroom Company to Lead the Boom
An investor, who we are about to reveal, has bought his first shares in a little known, magic mushroom company that will benefit tremendously from the growing psychedelic market. He bought Tilray at $12 and sold it at $145, his investment has grown as high as 400% since. This could’ve turned every $500 invested into $1.3 million.
When he talks, it pays to listen. Now he’s stepping forward to do something rare…
