Some disclaimers and background info, before I dive in:
Psychedelics are extremely powerful medicines that should not be taken lightly. In the right hands, they can be used to treat (and even cure) many mental health problems like depression and anxiety. These ‘right hands’ refer to people who use psychedelics with intent, have a therapist or trip sitter present, and are in an environment which is complimentary to the psychedelic experience.
Another important topic to address is the commercialization and application of capitalism to psychedelics. Again, psychedelics are powerful medicines that should not be exploited for pure monetary gain and/or commercialized in a monopolistic manner. However, that said, private companies must secure patents/IP to ensure that their capital is being allocated towards efforts that ensure the success of the company. Otherwise, there would be no motivation for a company to pursue valuable IP if there was no reward to the investors/company that are taking the risk with their capital and time. This is clearly a tough balance to maintain (securing IP, while at the same time creating pathways for these medicines to be widely available to the general public).
It’s worth noting that there are several ‘camps’ within the psychedelic ecosystem that have different viewpoints about how these medicines should be available. On one end of the spectrum, there are some who believe that psychedelics should be completely legalized and available to all, just as nature intended (Decriminalize Nature is at the forefront here). On the other end of the spectrum are private companies (most notably, Compass Pathways), who have been filing patents on actual drug molecules and even methods of therapy (i.e. what the interior of a clinic should look and feel like). Then there are non-profits who are funding research that includes FDA Clinical Trials, with the intent to make psychedelic drugs broadly available through traditional healthcare infrastructure (Usona Institute and MAPS are two leaders in the non-profit space).
Personally, I don’t believe there is any correct answer when it comes to the multiple different opinions that exist in the psychedelics community. The wide range of opinions is exactly what is needed in order for psychedelics to be integrated into society properly. One camp’s argument is met with an equal and opposite argument from a different group. Eventually, the ultimate outcome will likely be somewhere in the middle of the wide range of opinions that currently exist… Which is exactly how capitalism works and how democratic societies exist.
Finally, I want to point out that I have been writing publicly about psychedelics, from an investment perspective, for a couple years now. I first talked about them in 2019 here, then several more times here, here, and here. Furthermore, I have founded two separate companies in the psychedelics space (more info about that later, as they are currently getting acquired), and have invested in over 20 private companies (MindMed, BeckleyPsytech, Bright Minds, atai Life Sciences, Tripp, and many others).
I mention all of this because I know I will get lots of emails attacking me that I have no idea what is going on in the world of psychedelics. I receive these emails every time I bring up this topic. So, while I am no scientist, I can certainly say that I am much more aware of what’s going on than the average person.
***I am personally invested in dozens of private and public psychedelic investments, some of which are mentioned above and below. Nothing here is investment advice.
Ok, disclaimer complete.
These Medicines Will Help Society, And Your Investment Account
The United States spends over $700 billion per year on mental health care and addiction abuse. While this may sound like a massive amount of money, this number only makes up for 6% of total healthcare spending every year.
Meanwhile, one out of every five people in the United States has received mental health treatment in the past year. That’s over 60 million people who have paid for therapy, psychiatric drugs, or some alternative therapy (meditation, hypnosis, etc.).
Shockingly, well over 50% of people who do have mental health or addiction problems never seek treatment. So, the actual number of people around the world that do suffer, may never even make it known that they need help. This means that we likely don’t know the true number of people that are in need of real treatment.
Most available treatments and therapies are provided on long term timelines. Whether it’s actual talk therapy or a prescribed drug, both of these treatments typically last for years… If not, the entire life of a person.
Furthermore, sticking to these treatment options is inconvenient and expensive. How many people have the luxury of spending time talking with a therapist on a weekly or monthly basis (never mind the cost of actually paying that therapist)?
Similar issues arise with prescribed psychiatric drugs (anti-depressants, mood stabilizers, anti-anxiety agents, etc.). These medications are extremely expensive, require strict compliance, and worst of all, dosages and types have to frequently be adjusted by a doctor due to unwanted side-effects and efficacy.
That’s where psychedelic medicines come in play…
Now, before I make psychedelics sound like a magic bullet that cures all, I want to emphasize the power that exists within these medicines.
There’s a reason why some of the most notable and successful people in the past century have credited psychedelics to their growth as a human. Steve Jobs was famously quoted, saying:
“Taking LSD was a profound experience, one of the most important things in my life. LSD shows you that there’s another side to the coin, and you can’t remember it when it wears off, but you know it. It reinforced my sense of what was important — creating great things instead of making money, putting things back into the stream of history and of human consciousness as much as I could.”
Again, I’ll stress, psychedelics are not the cure-all super drug. However, based upon thousands of years of use by humans and recent research, psychedelics can be used as a powerful tool to apply to the human mind.
Unfortunately, psychedelics have been almost entirely outlawed around the world, as they have been lumped into the international drug war. Even though psychedelics are non-addictive and cannot cause death due to overdose, these powerful medicines are essentially off-limits to the general public.
Let me fast forward a bit…
Despite 2020’s notorious reputation, last year was actually a groundbreaking time in history for psychedelic medicines. In addition to numerous breakthrough research discoveries, dozens of private companies raised hundreds of millions of dollars to bring psychedelic medicines to the forefront of modern healthcare.
There is still much ground to cover, but the trend is clear. Psychedelics are proving to be extremely effective in treating a wide range of mental health problems, which include anxiety, addiction, depression, end-of-life stress, and many others.
These medicines are proving to be just as, and in many cases, more effective that traditional pharmaceutical products that are currently on the market.
The introduction of psychedelic medicines to the broader public could spur a revolution in mental health care treatment (and maybe even expand the collective human consciousness in amazing ways that we can’t even fathom).
So, how do we invest in this trend? Here are three ways you can take action now:
- Create a basket of major public companies. MindMed, Compass Pathways, atai Life Sciences, Cybin, GH Research, Seelos Therapeutics, and Field Trip are all great companies that are trading on major exchanges (NYSE and NASDAQ).
- Create a basket of smaller public companies. Tryp Therapeutics, Bright Minds Biosciences, Braxia Scientific Corp., Wesana Health Holdings, Entheon Biomedical, Novamind, Revive Therapeutics, Mydecine Innovations, and Numinus Wellness are all worth looking at.
- Invest in private companies. This is, by far, where the most opportunity exists. While you have to be an accredited investor to participate in most private investments, there are currently two private psychedelics companies raising capital from non-accredited investors. EI Ventures is raising through a Reg A+ and PsiloThera is using Reg CF, which means that both of these companies are private but accepting capital from non-accredited investors. (Note: I am not an investor in either of these two companies.)
With over one billion people around the world that currently experience mental health issues, the market potential of psychedelic medicines is enormous. The coming years will involve lots of speed bumps along the way, but the long-term potential of these medicines is likely to positively effect hundreds of millions of people.
Enormous profits have already been made for the small percentage of investors who have already allocated capital to this space. The future of the psychedelics industry is almost certain to provide even more upside for investors, and even more importantly, positive mental health impacts for our broader society.