Psychedelics and Mental Health

- January 19th, 2021

The magic mushroom landscape has launched a research race for companies evaluating new treatments connecting psychedelics and mental health.

When it comes to psychedelics and mental health, investors have started to see just what is possible for the emerging industry.

Psychedelic drug therapies have caught the eye of the capital markets as various companies race to develop novel medicine treatments.

With research showing promising results in terms of where the industry may be heading — including treatments for mental health issues like anxiety — here the Investing News Network (INN) offers a closer look at the connection between psychedelics and mental health.


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Through the therapeutic use of psychedelic experiences, new companies plan to offer relief for patients with drugs based on psychedelic mushrooms.

Psychedelics and mental health: Psychedelic use ingredients

The conversation surrounding psychedelic drugs as the next best solution for serious mental health issues has picked up recently, with new research continuing to expand the knowledge available on these therapies and on the benefits available to patients.

As it stands, the market is divided into the following psychedelic substances, according to a report from the Toronto-based NEO Stock Exchange:

  • Ayahuasca
  • DMT (N, N-dimethyltryptamine)
  • Ibogaine
  • Ketamine
  • LSD (lysergic acid diethylamide)
  • MDMA (3,4-methylenedioxy-methamphetamine)
  • Psilocybin

The US, a standard bearer for the drug regulation landscape, currently lists most of these psychedelic ingredients as illegal under its scheduled drug categories. According to the NEO’s report, ayahuasca is not a controlled substance under regulations from the US and the UN.

Despite the current regulations, the US Food and Drug Administration (FDA) has shown it is interested in and willing to engage with psychedelic drug breakthroughs. The drug agency has awarded its “breakthrough therapy” moniker to a psilocybin-based study treating major depressive disorder, confirming its potential as a medical benefit to patients.

Based on this promise and on encouraging discussions with medical authorities, companies are pursuing medical research despite the lack of serious widespread legalization conversations at the moment.

In an interview with INN, Ronan Levy, founder and executive chairman of privately held Field Trip Health, said he’s been told of progressive conversations with the US federal authority and psychedelics companies. He said the FDA has been supportive of current trials evaluating psychedelics.


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Psychedelics and mental health: Research paves way for investment excitement

In the fight to secure new mental disorder treatments, companies focused on psychedelics are using research to pursue proven results, following the example of the pharmaceutical industry.

Operating companies are pursuing research-heavy approaches with the goal of developing brand-new medical products based on psychedelic medicines. One such company is Mind Medicine (MindMed) (NEO:MMED), which in December 2020 announced a successful pre-investigational new drug meeting with the FDA for a clinical study on using LSD to treat anxiety.

Dubbed Project Lucy, the MindMed study will consist of a Phase 2b human trial, marking the first time the company will employ an “experiential” psychedelic therapy as part of its overall research pipeline.

Levy told INN that at the moment the industry is heavily centered on a traditional drug development path. His firm, which has opened a clinic in Toronto offering ketamine-based therapies, recently launched a research and development division tasked with advancing the firm’s studies.

As excitement for research increases, Levy said the industry, including his own operation, is playing the long game right now. However, according to the executive, the current projected timeline for research approvals is very positive compared to the decades of stigma and uphill battles the industry has faced.

“I think that timeframe is actually quite remarkable and entirely consistent with, you know, most conventional drug development programs,” Levy told INN.

Levy said Field Trip is on the path to see its next-generation psychedelic molecule, FT104, approved and available in the market potentially by 2026.

He also highlighted a trial conducted by the Canadian division of the Multidisciplinary Association for Psychedelic Studies (MAPS), saying it could see approval by 2023. MAPS’ study proposes an MDMA therapy for post-traumatic stress disorder.


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In early January 2021, Field Trip announced its participation in a MAPS study for the investigation of MDMA in the treatment of eating disorders such as anorexia nervosa and binge eating. The company’s Toronto clinic will serve as a trial location for the upcoming study.

Psychedelics and mental health: Modern mental health advancements

If one thing is clear, it’s that this industry is poised to investigate products and therapies for use in the next wave of medical treatment for anxiety, depression and potentially even opioid addiction.

In January 2020, new findings were published in the Journal of Contextual Behavioural Science, according to PsyPost, showing that a majority of people believe psychedelic elements like psilocybin could lead to “increased psychological flexibility after the experience.”

One former athlete has also spoken at length about the benefits of these drugs for head-related injuries.

During an online webinar with private Canadian firm Field Trip, former NHL player Daniel Carcillo, a two time Stanley Cup champion, spoke at length about the way plant-based medicine and in particular psychedelics helped his treatment after his departure from the world of hockey.

Carcillo has stepped into advocacy work for novel therapies for the treatment of concussions and mental health disorders, alongside other head injuries for professional athletes.

Psychedelics and mental health: Investor takeaway

Investors looking to jump aboard the psychedelics investment train will have to seriously consider the implications of following high-grade research akin to the work seen in the pharmaceutical industry — including the lengthy timelines associated with those efforts.

However, the potential of breakthrough drugs and approvals offers the possibility of future gains as companies focus on developing the new wave of psychedelics and mental health treatments.

This is an updated version of an article first published by the Investing News Network in 2020. 

Don’t forget to follow @INN_LifeScience for real-time updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


New Report:
Psychedelics Outlook
for Investors

What’s ahead for this new market?
Find out in our exclusive psychedelics outlook INNvestor Report.
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