Psychedelics Market Forecast: Top Trends for Psychedelics in 2025

State-level regulatory advances in psychedelics

While Federal reform has stalled for now, some states are forging ahead with their own regulatory frameworks for psychedelics, demonstrating a proactive approach to the evolving landscape.

Oregon was the first state to establish a legal framework for regulated psilocybin use.

The Oregon Health Authority, tasked with overseeing the Oregon Psilocybin Services Act, recently concluded a public comment period from October 1 to 21, 2024, allowing for public feedback on proposed rules and regulations surrounding the Act, which legalized therapeutic psilocybin use within the state.

The new guidance was published on November 22 and included provisions such as annual training for facilitators.

Colorado is also moving forward with its psychedelic-assisted therapy program, which should begin this year.

Regulators held a forum for potential business license applicants on November 12 and started accepting applications on December 31. In addition, bipartisan lawmakers introduced a bill to allow doctors to prescribe synthetic psilocybin if the FDA approves it, further demonstrating Colorado's dedication to a regulated industry.

Reform legislation could spread to other states in 2025 as well.

In Michigan, Representative Mike McFall introduced HB 5980 in September 2024 to legalize psilocybin mushrooms for therapeutic use under the supervision of a licensed therapist, with a focus on treating PTSD.

The New Jersey Senate also amended and approved S2283 in October 2024 to legalize psilocybin therapy, which now awaits voting in the full Senate and Assembly. The next Assembly session is scheduled for March 27, 2025.

Finally, New York introduced NY S00495 to the state House of Representatives on January 8, which would legalize psilocybin therapy for qualifying conditions and establish a program for licensed facilitators; and in Washington, a pre-filed bill would allow adults 21 and older to legally use psilocybin with the support of a trained facilitator, taking a dual approach that includes both clinical use and a “wellness track” for any adult.

These legislative developments across multiple states indicate a growing momentum towards greater acceptance and regulation of psychedelics, potentially paving the way for broader changes at the federal level in the future.

Psychedelics companies adapt

2025 is shaping up to be a year of transition and strategic maneuvering for key psychedelics players.

Lykos Therapeutics underwent significant changes after the FDA’s decision, including board member departures, staff layoffs and the resignation of CEO Amy Emerson. Compass Therapeutics (NASDAQ:CMPX) also adjusted its strategy, delaying the readout of its Phase III trial of COMP360 to the second half of 2025, underscoring the challenges of navigating the regulatory landscape and bringing psychedelic therapies to market.

Despite these hurdles, other companies are forging ahead with their research and development efforts.

Cybin (NYSEAMERICAN:CYBN) continues to advance its pipeline, exploring the therapeutic potential of various psychedelic compounds, as does Mind Medicine (NASDAQ:MNMD) which was added to the Nasdaq Biotechnology Index (INDEXNASDAQ:NBI) on December 23. Numinus Wellness (TSX:NUMI,OTCQB:NUMIF), meanwhile, made a strategic move by selling its five US clinics to focus on its business and research in Canada.

Looking ahead, industry experts like Sassoon anticipate that the first FDA-approved and rescheduled psychedelic-based therapy may not arrive until 2027 or 2028. This timeline provides a realistic framework for investors and highlights the long-term vision required in this exciting but still emerging field.

While the path to commercialization may be longer than initially anticipated, the companies navigating these challenges today are laying the groundwork for a future where psychedelic therapies play a significant role in mental healthcare.

This revised version provides a more specific update on the mentioned companies and their outlook for 2025, acknowledging the challenges while also highlighting their ongoing efforts and the long-term potential of the industry.