Definitive Guide For The Emerging Psychedelics ‘Market’: 3 Things for Investors to Know

If you are interested in psychedelics, you probably heard the news that the Canadian Mindmed recently closed $24 Million Ahead of IPO and Field Trip Psychedelics raised $8.5M in Series A last month. This news opened the gates for the next stock market fad for investors, if the markets are still standing — that is.

Based on the lessons from the cannabis green rush, this note will go over the key characteristics of the market potential for psychedelics, based on decades of combined experience in psychedelics, in order to point to the true value for strategic investors.

Where is the potential?

Clinical studies done in the 1960s, and the resurgent studies in universities across Europe and North America in the early 2000s combined together to provide enough scientific grounds to sketch the immense potential that substances likes MDMA, psilocybin, Ketamine, LSD, ibogaine, etc. could have on ways in which people heal and manage mental health challenges, such as depression, addiction and trauma.

MAPS, an association spearheading research since 1986, announced a historic win last year, revealing that MDMA will be an FDA-approved drug by 2021. This means that MDMA will be an approved medicine in the United States. This also means that the medicine can be authorised in any other country (as a Special in the UK, or with an authorisation for the market in France, for example), meaning it can theoretically be used as a medicine in any country of the world. At the same time, the FDA granted a ‘breakthrough-therapy’ status to psilocybin, an active ingredient of magic mushrooms last November, bringing it closer to the status of medicine.

This is coupled with timid, yet historic regulatory progress in three US cities within the past year that decriminalised some form of psychedelics (Denver, CO; Santa Cruz and Oakland, CA), and more like Oregon, Chicago and California incoming.

How are psychedelics (vastly) different than cannabis, what are the business models and where is the value?

1. The real potential to immensely revolutionise psychiatry (and thus bring proportionate profits) is in psychedelic-assisted therapy, and not consumer goods.

Just like the new-super-ingredient cannabidiol (CBD) that exploded on the consumer market (and can be found anywhere from cookies, supplements, creams, hair products and pillows), ketamine sprays or microdoses of mushrooms that are popping up are only the tip of a huge iceberg.

When it comes to cannabis, the real potential is in the full-spectrum plant, a highly complex tapestry of compounds that work together to create the entourage effect, or a sort of exponential effect of addition whereby 1 + 1 equals 3. By a similar token, some of the psychedelic goods we see materialising online (Ketamine-infused sprays, infused superfoods, nutraceutical micro-dosing supplements), may not tap into what is truly valuable in psychedelics: their effect in a psychotherapeutic setting. While consumer goods show a simpler picture of return margins, they are not what makes psychedelics so powerful.

Clinical studies of psychedelic-assisted psychotherapy have already brought startling results: in a research done by MAPS, two thirds of patients with treatment-resistant Post Traumatic Stress Disorder (PTSD) no longer met the criteria for diagnosis (ie. were cured of PTSD) after MDMA therapy.

This is where all the fuss comes from, aptly illustrated by a metaphor that “MDMA could be [as] important for the future of psychiatry as the discovery of antibiotics was for general medicine a hundred years ago,” by Dr Ben Sessa in this TED talk. Rick Doblin (the legend you can read about in the book Acid Test) and the team at MAPS have already began training therapists to guide psychedelic sessions.

Caption: Dr Ben Sessa holding pharma-grade MDMA, still from documentary The Psychedelic Renaissance

2. Clinics offering Psychedelic-assisted therapy will likely be the dominant business model.

Clinics are likely to be the emerging business model in the psychedelic sphere, including thoroughly trained guides and staff, facilities designed for psychotherapy and pharma-grade psychedelics. In a bid to raise its profile before heading into public markets, Field Trip Health, the clinics subsidiary of Field Trip Psychedelics Inc, just opened its first Ketamine clinic in Canada for treating depression and anxiety. 

Different approach in the Czech Republic: the psychedelic clinic PSYON now offers only counseling services for integration of psychedelic experience by trained therapists. The reason for this is simple:

“Integration of the psychedelic experience is often more important than the experience itself,” says Eva Cesarova, media coordinator for the psychedelic research team at the National Institute for Mental Health and co-founder of the Czech Psychedelic Society.

In other words, understanding what happened during a psychedelic experience is essential in reaping the benefits. 

Be it Canadian psychedelics-speciality clinics, universities (such as Imperial College of London, University of Bristol, Johns Hopkins University), or Gwyneth-Paltrow-vetted list of 10 Centers for Psychedelic Healing, Therapy, and Exploration, clinics are where the revolution in psychiatry and psychotherapy is happening.

3. Europe and North America have a thriving and longstanding psychedelic community.

Numerous conferences that sprang up in Europe in the past 10 years such as Breaking Convention, Beyond Psychedelics, Mind conference or Boom festival, as well as Psychedelic Societies around the world that promote science and culture, are true hives of budding potential where researchers, clinicians, scholars, psychonauts and people at the forefront of innovation gather to learn from each other about the potential of healing, insight and wonders behind the doors opened by psychedelics. If there is a message of a community that gathers in these events, it is to think in terms of integration - both of psychedelic experience into the daily life after a psychedelic session, as well as integration of lessons that psychedelics teach into psychotherapy, medicine, ecology, politics and society at large.

In terms of ingestion of psychedelics, powerful and potent as the potential effects may be, lack of right preparation, mindset or approach can spell trouble. This is why any serious business-oriented venture must take into consideration the wealth and depth of the existing knowledge of the field, as well as learn from well-trodden paths. Everything is more or less considered, the task is just to find the right people - therapists, scholars, designers, artists, researchers - and connect with them. 

Another unraveling is about the ways in which we do business and participate in the economy. More specifically, psychedelics offer insights into how we treat ourselves, other people and services, how we relate to extracting things from the earth and what we leave behind in this process, how and when we employ and nurture compassion, how we grow and support, and how comprehensive our vision is - in including people who are different than ourselves, and other beings such as animals, plants, the Earth. 

While the promises of therapeutic benefits might surpass those of cannabis in terms of revolutionising the field of medicine and mental health care, the space is likely to be more restrictive for making quick money due to even tougher regulatory considerations, business models that require expertly trained staff and rely less on consumer goods, as well as the Covid-19 economic downturn that seems to have cut the ‘emergence’ of the psychedelic ‘market’ in its naissance. While it is true that capital helps move things forward, the real challenge is how will investors integrate the European constellation of psychedelic-savvy researchers, therapists, and institutions in order to manifest the immense potential of the psychedelic renaissance.

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Authors: Anya Oleksiuk, Haya al-H, Sara Velimirovic 

PS Check out this trailer for “The Psychedelic Renaissance”, a documentary featuring leaders in psychedelic research and advocacy.

PPS What is actually legal?

Ketamine is an anaesthetic widely used in medicine around the world. It belongs on the World Health Organisation’s list of essential medicine. As such, it is an approved drug and legal for use in  medical settings, but it only recently became popular as a treatment for depression because of its hallucinogenic and disassociate effects.

Psilocybin truffles are legal in the Netherlands, which is how the Synthesis Retreat center outside of Amsterdam operates. Furthermore, the FDA trial of psilocybin breakthrough therapy will likely make it an approved medicine soon, able to be used anywhere around the world with appropriate licensing and staff.

MDMA will be an FDA-approved drug by 2021. This means MDMA will be an approved medicine in the United States. This also means that the medicine can be authorised in any other country (as a Special, or authorised for the market), which would imply that it can theoretically be used as medicine in any country in the world.

Ibogaine is a powerful compound used in treatment of addiction, derived from iboga, a root bark of a tree that grows in West Africa. Ibogaine is not regulated in many jurisdictions because it is rare and many countries have not been exposed to it. Ibogaine clinics are springing up because of potential in treating heroin, alcohol, and other addictions.