Shroom Stocks

Psychedelic Stocks to Watch

In November 2020, Oregon made history by becoming the first U.S. state to legalize psilocybin, the active ingredient in so-called magic mushrooms. Much like cannabis, psychedelics are becoming more mainstream, and investors are sizing up what could be a major long-term growth opportunity, especially as companies develop therapeutic uses for the compounds. Market research firm Research and Markets estimates that the worldwide legal psychedelic drugs market will grow to $10.75 billion by 2027, up from from $4.75 billion in 2020.

Unfortunately, cannabis stock investors know the nascent business has faced many regulatory hurdles and experienced multiple boom-and-bust cycles, so psychedelics investors must have a high risk tolerance. Here are seven top psychedelics stocks to watch.

Mind Medicine Inc

Mind Medicine is a biotechnology company that is running clinical trials on multiple drug candidates. Two of its trials are focused on LSD, and the third is focused on the psychedelic drug ibogaine, a naturally occurring substance found in a West African shrub. Mind Medicine’s Project Lucy LSD trial to treat anxiety is in phase 2b testing, while its LSD microdosing and opioid withdrawal projects both recently entered phase 2 testing. The company is also participating in collaborations to investigate cluster headache treatment and LSD-assisted therapy. Depression, attention deficit (hyperactivity) disorder and addiction are massive markets and provide tremendous long-term potential.

Compass Pathways PLC (CMPS)

Compass Pathways is testing the synthetic psilocybin therapy COMP360 for treatment-resistant depression and post-traumatic stress disorder, or PTSD. Trial patients take COMP360 in a controlled environment, and a therapist talks them through the experience. Similar phase 3 trials by the University of California—San Francisco using MDMA, or ecstasy, to treat PTSD recently yielded positive results. Compass Pathways completed its initial public offering in September 2020, selling shares at $17 per share. Since its debut, the volatile stock has traded as high as $60 but has since dropped back below $25. Investors should expect further trial data to trigger more volatility in CMPS stock.

Field Trip Health Ltd. (FTRP)

Field Trip Health is another company researching a synthetic psilocybin molecule, drug candidate FT-104. Field Trip believes FT-104 has a similar potency to psilocybin but generates a shorter period of psychoactivity, potentially making it preferable for use in treating patients. In February 2021, Field Trip Health opened a research laboratory in Mona, Jamaica. The new facility is the world’s first legal research facility dedicated exclusively to psilocybin and other plant-based psychedelics. In July, Field Trip was granted a Nasdaq listing and began trading in the U.S. under the ticker FTRP.

Cybin Inc. (CYBN)

Cybin is a Canadian pharmaceutical company developing psychedelic medicines for the treatment of illnesses such as depression, anxiety and addiction. The company’s clinical-stage Embark trial is testing psilocybin in treating the mental distress of frontline health care workers. In May, Cybin was approved to begin phase 2 clinical trials of CYB001 in treating major depressive disorder. In November, Cybin reported positive preclinical findings for its CYB003 deuterated psilocybin analog in treating alcohol use disorder and major depressive disorder. Cybin was also granted a New York Stock Exchange listing in July 2021 and began trading under the ticker CYBN in August.

Numinus Wellness Inc. (NUMIF)

In June 2020, Numinus Wellness made history by becoming the first public company in Canada to be granted a cultivation license to produce and extract psilocybin. Numinus has import, export and distribution licenses for DMT, psilocybin, ecstasy and other psychedelic drugs. In April, Numinus launched a new phase 1 clinical trial in partnership with KGK Science Inc. to test its own naturally derived psilocybin formulation on patients. The trials could provide useful information on the potential benefits of natural psilocybin compared to synthetic versions. Numinus also generates revenue from third-party cannabis testing, which the company reinvests in its psychedelics initiatives.

Atai Life Sciences NV (ATAI)

Atai Life Sciences is developing multiple drugs based on ibogaine, ketamine and other psychedelic substances. Atai went public in June, and its early investors include billionaire venture capitalist Peter Thiel. The company has struggled since it priced its IPO at $15, and the stock is now trading at less than $8 per share. However, with a market cap of $1.2 billion, Atai is still the largest biotech stock specifically focused on psychedelics. Atai has nine drug candidate programs, four of which are already in clinical testing. Its leading drug candidate, RL-007, is in phase 2 testing for treatment of schizophrenia.

Seelos Therapeutics Inc. (SEEL)

Seelos Therapeutics is a biopharmaceutical company with four clinical-stage pipeline programs. Seelos is in phase 2 testing of drug candidate SLS-005 for treatment of both amyotrophic lateral sclerosis – Lou Gehrig’s disease – and spinocerebellar ataxia. SLS-005 is a type of sugar consisting of two molecules of glucose. The company’s SLS-002 intranasal ketamine and its SLS-003 sublingual ketamine drugs are its psychedelic pipeline candidates. Seelos is testing SLS-002 to treat acute suicidal ideation and behavior in patients with major depressive disorder. It’s also testing SLS-003 to treat complex regional pain syndrome. Finally, Seelos has two preclinical gene therapy programs, called SLS-004 and SLS-007, that target Parkinson’s disease.

Psychedelic stocks to watch:

  • Mind Medicine Inc. (MNMD)
  • Compass Pathways PLC (CMPS)
  • Field Trip Health Ltd. (FTRP)
  • Cybin Inc. (CYBN)
  • Numinus Wellness Inc. (NUMIF)
  • Atai Life Sciences NV (ATAI)
  • Seelos Therapeutics Inc. (SEEL)