Oregon just became the first state in the U.S. to legalize the active ingredients in magic mushrooms for medical use.
Oregon’s Measure 109 will grant access to psilocybin. Psilocybin is the active ingredient in magic mushrooms used for mental health treatments.
This is a groundbreaking moment for psychedelic therapies. More than that, it is also creating a great investment opportunity.
Oregon is part of a larger trend.
In the District of Columbia, voters just decriminalized magic mushrooms and other psychedelic substances with the recent passing of Initiative 81.
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In New Jersey, lawmakers took a big step towards reducing penalties for possession of magic mushrooms. A criminal justice reform move brings them closer to passing a bill to guide the marijuana industry in New Jersey.
These legal victories are giving birth to a new industry – psychedelic pharmaceutical drugs.
New Industry – Psychedelic Pharmaceutical Drugs
Analysts expect the psychedelic drug industry to grow sharply in the coming years.
Data Bridge Market Research projects that the psychedelic drug market will grow by 16.3% from 2020 to 2027. This growth stems from increases in depression and mental disorders in the U.S.
As a result of bullish growth projections, investors are asking… how do I invest?
Back in September, I revealed three promising ‘magic mushroom’ stocks.
Since my analysis, those stocks have jumped higher. A steady stream of good news has propelled the bullish move.
3 Promising “Magic Mushroom” Stocks
Mind Medicine (NEO: MMED, OTC: MMEDF) is a young biotech company headquartered in New York, New York, with a market cap of $725 million.
The company has six clinical trials happening or planned using psychedelic substances. Wall Street is optimistic about these trials and the long-term potential. Consequently, shares of Mind Med have surged in the last three months. The stock’s price is up more than 600%, hitting a series of new all-time highs.
Champignon Brands (CSE: SHRM, OTC: SHRMF) is another promising young biotech headquartered in Vancouver, BC., with a market cap of $36 million.
Champignon is also developing and commercializing psychedelic drug treatments for depression, anxiety, and substance abuse. Shares have been volatile in 2020 and are down sharply from the 52-week high.
Looking forward, this looks like a good place for shares to establish a long-term bottom and reverse back to a bull market.
Compass Pathways (NASDAQ: CMPS) is a UK-based startup with a market cap of $2 billion. The company is backed by billionaire Peter Thiel, an early investor in Facebook (FB) and one of the founders of Paypal (PYPL).
In 2018, Compass established itself as a pioneer in psychedelic drugs. Accordingly, the U.S. Food and Drug Administration (FDA) gave Compass “breakthrough status” on its psychedelic therapies. The status upgrade enables the company to fast track drug testing and development.
Compass began trading on the NASDAQ in September and shares have almost doubled since then.
The Big Picture
Psychedelic therapies are gaining credibility in the medical community as an effective treatment for depression and anxiety. For this reason, five-year industry projects look strong.
Investors will want to keep a close eye on the stocks positioned to benefit from this industry trend. This includes the three companies already making headway in the psychedelic market.
Author Michael Vodicka owns shares of Compass Pathways (CMPS).
About the Author & Cannabis Stock Trades
Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.
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