INN spoke to a pair of psychedelics companies about industry engagement and conversations they’re having with interested investors.
After a welcome party of a year for the psychedelics investing space, how exactly does investor appetite stand as the new year begins?
The psychedelics investment proposal has started to grab the attention of investors across the board as more companies begin hitting the public markets.
While it’s clear attention is rising, the Investing News Network (INN) spoke with two companies to get their thoughts on investor interest and how they see this new market.
“It seems incredibly strong,” Ronan Levy, co-founder and executive director with Field Trip Health (CSE:FTRP), said of current investor sentiment towards psychedelics.
Levy said his company recently completed a bought deal raising, which was oversubscribed by about two and a half times from the original deal. “The demand seems to be pretty palpable, both on an institutional level as well as on a retail level,” he told INN.
The new year has brought an uptick in offerings from psychedelics companies. In January, companies such as Mind Cure Health (CSE:MCUR,OTCQB:MCURF), Havn Life Sciences (CSE:HAVN), Cybin (NEO:CYBN) and Mind Medicine (MindMed) (NEO:MMED,OTCQB:MMEDF) all confirmed significant investment deals.
Payton Nyquvest, chairman and CEO of Numinus Wellness (TSXV:NUMI), told INN the psychedelics industry has experienced a perfect storm of validation from the financial community as well as the regulatory space thanks to increased acceptance from investors, along with recent policy updates that have further opened the doors to psychedelics.
Nyquvest said he spends the majority of his time with potential investors clarifying key questions about the space, such as the actual logistics of psychedelics-assisted psychotherapy, regulatory timelines for policy changes and the legal framework in place.
When it comes to the type of investors associated with the space at the moment, Levy said there certainly are some looking for an exciting trade opportunity given the bump in attention for this market.
However, many are appreciating the long-term nature of the psychedelics industry.
“Most of the investors I can say that we brought in as part of our our bought deal understood the long-term potential and that this is an evolving industry and it’s going to have its ups and downs,” Levy said.
How to differentiate psychedelics investments?
With increased demand from the market, the psychedelics space has seen a rush of brand new listings and emerging companies fighting for the attention of a growing investor base.
Nyquvest told INN he recommends that investors pay attention to the people involved with these companies first and foremost. “My question is always, ‘What is their research and implementation plan?’ And then looking at what it costs,” the Numinus executive said.
He stressed that investors need to be ready to comprehend the demands of research work and the amount of time this represents for companies.
Nyquvest said he’s encouraged by the discussions on due diligence that he’s seeing surrounding the space as more companies go public.
First psychedelics fund shows growing investor demand
At the end of January, Horizons ETFs Management (Canada) launched the first exclusively dedicated psychedelics exchange-traded fund (ETF) in the industry. The Horizons Psychedelic Stock Index ETF (NEO:PSYK) came to the market with a basket of 17 stocks.
Steve Hawkins, CEO of Horizons ETFs, told INN his company started doing research on psychedelics early in 2020, when attention was first starting to fall on the sector.
The firm was previously responsible for launching the first Canadian cannabis ETF, and the executive said for that reason Horizons ETFs quickly started getting questions and seeing general interest from investors about a potential psychedelics ETF.
Psychedelic investments are poised to see an intensifying focus in 2021, following a coming out party of a year in 2020. As investors grapple with the intricacies of this space, more companies are expected to hit the open market.
When asked about potential catalysts for the psychedelics space in 2021, Levy told INN he expects to see a potential listing from ATAI Life Sciences at some point this year, which could drive even more attention to the space overall.
Meanwhile Nyquvest added he’s excited to see the performance of companies throughout 2021 in terms of implementation, since he believes this year will be able to really offer clear ups in terms of which companies are really performing in the sector. “I think that’s really going to take things to another level,” he said.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Cybin, Mind Cure Health and Numinus Wellness are clients of the Investing News Network. This article is not paid-for content.
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.