Summary: From ancient shamanic traditions to groundbreaking mental health research, psychedelics have made a profound and colorful impact on human history. Fast forward to today, and the enigmatic compounds are no longer just tripping minds but making waves on Wall Street. In this guide, we present the top 5 psychedelic stocks to buy in 2024 listed on major exchanges easily accessed through regulated platforms like Interactive Brokers or eToro.
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What are psychedelics?
Among the most recognized psychedelics are LSD (Lysergic acid diethylamide), psilocybin (found in certain fungi), DMT (Dimethyltryptamine), mescaline (derived from certain cacti), ayahuasca (a brew from the Amazon), MDMA (often referred to as “Ecstasy” or “Molly”), ketamine and ibogaine (from the African shrub iboga).
Internationally, many psychedelics are classified under Schedule I of the United Nations Convention on Psychotropic Substances of 1971, prohibiting their production, sale, and possession. These global directives, however, don’t prevent individual countries or regions from revisiting and reformulating their own drug policies. As a result, while many countries uphold strict prohibitionist stances, others are gradually moving towards decriminalization or medical-use exceptions.
Top 5 psychedelic stocks to buy in 2024
The global market for psychedelic drugs grew from $4.2 billion in 2022 to $4.83 billion in 2023, marking a compound annual growth rate (CAGR) of 14.9%. By 2029, projections indicate that this market will nearly double, reaching an estimated $8 billion.
Needless to say, the rise of the psychedelic market has captured the attention of both startups and established pharmaceutical giants keen to tap into this trend, making early psychedelic stocks potentially very lucrative.
Here is our pick for the top 5 psychedelic stocks to buy in 2024 at the forefront of psychedelic research, development, and production:
- Cybin (NYSE: CYBN);
- Seelos Therapeutics (NASDAQ: SEEL);
- GH Research (NASDAQ: GHRS);
- Compass Pathways (NASDAQ: CMPS);
- Numinus Wellness (TSX: NUMI).
Where to buy psychedelic stocks?
To securely invest in psychedelic stocks, consider these brokers:
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Now, let’s dive in deeper. And stay tuned as we unveil a bonus option for investing in psychedelic stocks.
1. Cybin
Cybin Inc. (NYSE: CYBN) is a Canadian-based biopharmaceutical company developing therapeutic solutions derived from psychedelic compounds with a mission to treat mental health conditions such as depression, alcohol dependence, anxiety, and neuroinflammation.
The company is currently working on CYB003, a property deuterated psilocybin analog aimed at treating major depressive disorder, and CYB004, a proprietary deuterated DMT molecule targeting generalized anxiety disorder. Complementing these endeavors, Cybin has also rolled out EMBARK, a form of therapy that melds the benefits of psychedelics with psychotherapy.
Cybin went public in August 2021, listing its shares on the New York Stock Exchange (NYSE)
Cybin stock price today
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2. Seelos Therapeutics
Seelos Therapeutics, Inc. (NASDAQ: SEEL) is a New York-based clinical-stage biopharmaceutical company that develops and markets treatments for the central nervous system, respiratory, and various other conditions.
Leading their portfolio is SLS-002, a ketamine-based nasal spray targeting acute suicidal tendencies in those with major depressive disorders, followed by SLS-005, designed for conditions like amyotrophic lateral sclerosis and Sanfilippo syndrome and SLS-006, tailored for Parkinson’s disease patients.
Founded in 2016, Seelos Therapeutics underwent a merger with the publicly traded Apricus Biosciences in January 2019. The merged company, largely retaining Seelos’ operations, adopted the Seelos name and transitioned its Nasdaq ticker symbol from “APRI” to “SEEL.”
Seelos stock price today
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3. GH Research
GH Research (NASDAQ: GHRS) is a Dublin-based clinical-stage biopharmaceutical company dedicated to revolutionizing the treatment landscape of psychiatric and neurological disorders.
At the forefront of their innovation is exploring the therapeutic potential of the novel compound 5-Methoxy-N,N-Dimethyltryptamine, commonly known as 5-MeO-DMT, specifically addressing Treatment Resistant Depression (TRD).
Their flagship product, GH001, is an inventive formulation of 5-MeO-DMT delivered through a proprietary inhalation method. The progress with GH001 has been promising, as evidenced by the completion of two Phase 1 clinical trials with healthy volunteers and a pivotal Phase 1/2 clinical trial focusing on patients with TRD. Impressively, in the Phase 2 segment of the study, a single-day dosing regimen of GH001 prompted an ultra-rapid remission in 87.5% of the TRD patients.
Further enriching its product pipeline, the company is also advancing GH002, an intravenous mebufotenin candidate, and GH003, an intranasal mebufotenin candidate. Both are currently undergoing preclinical trials, targeting psychiatric and neurological conditions.
GH Research went public through an initial public offering (IPO) in June 2021 and trades on the Nasdaq under the symbol GHRS.
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4. Compass Pathways
Compass Pathways plc (NASDAQ: CMPS) is a London-based mental health care company that develops COMP360, a psilocybin therapy. This therapy is currently in Phase III clinical trials targeting treatment-resistant depression and in Phase II trials addressing post-traumatic stress disorder and anorexia nervosa.
In fact, the company’s phase 2b randomized controlled study with 233 patients across 22 locations evaluating COMP360 in treatment-resistant depression was the most extensive psilocybin clinical trial to date. This study aimed to ascertain the safety and efficacy of their COMP360 psilocybin treatment and reported that a singular 25mg dose of COMP360 psilocybin, combined with psychological guidance, resulted in a significant decline in depressive symptoms after just three weeks (p<0.001) with the positive effect remaining for as long as 12 weeks.
Compass Pathways was publicly listed on the Nasdaq stock exchange in September 2020 under the ticker CMPS.
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5. Numinus Wellness
Numinus Wellness Inc. (TSX: NUMI), headquartered in Vancouver, is an integrated mental health company that develops and delivers evidence-based, accessible psychedelic-assisted psychotherapy.
The company functions through three primary divisions: Research Operations, the Canadian Clinic Network, and the US Clinic Network. The Research Operations branch focuses on laboratory services, including psychedelic cultivation, analytical testing, and product R&D. Meanwhile, the Clinic Network provides a variety of services ranging from psychotherapy and counseling to neurofeedback and physiotherapy, targeting mental health and substance abuse. This division also facilitates training and resources for practitioners.
Numinus went public in May 2020 and is listed on the Toronto Stock Exchange (TSX) under the symbol NUMI.
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Bonus option: Mind Medicine
Mind Medicine (MindMed) Inc. (NASDAQ: MNMD) is a New York-based clinical-stage biopharmaceutical company developing novel treatments for brain health disorders.
Their primary product contenders are MM-120, currently in phase 2 trials for addressing generalized anxiety disorder and attention deficit hyperactivity disorder, and MM-402, designed around the R-enantiomer of 3,4-methylenedioxymethamphetamine, targeting core symptoms prevalent in autism spectrum disorder. Additionally, they’ve ventured into opioid withdrawal treatments with MM-110, an a3ß4 nicotinic cholinergic receptor antagonist that has successfully wrapped up its phase 1 trials.
The company went public through an IPO in April 2020 and began trading on the NEO Exchange in Canada and the NASDAQ in the United States under the stock symbol MNMD.
Mind Medicine stock price today
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Benefits of psychedelics
The field of psychedelic research has seen a renaissance in recent years, with growing interest from the scientific and medical communities. While the study of psychedelics is not entirely new, renewed attention has brought forward a variety of potential therapeutic applications. Here are some of the benefits suggested by research:
- Mental health treatment: Several studies have indicated that psychedelics, particularly psilocybin and MDMA, can be effective in treating a variety of mental health conditions, including depression, post-traumatic stress disorder (PTSD), and anxiety, especially in cases resistant to conventional therapies;
- Addiction: Research has shown promise in using psychedelics, especially psilocybin and ibogaine, to treat substance addictions such as alcoholism and nicotine dependency;
- End-of-life anxiety: Psychedelics like psilocybin have been explored for their potential to alleviate end-of-life anxiety in terminally ill patients, often helping them come to terms with their mortality;
- Enhanced creativity: There’s some evidence to suggest that psychedelics can enhance creativity and promote a sense of openness, potentially offering value in therapeutic settings to address various psychological challenges;
- Improved Relationships: MDMA is being researched for its potential in couples therapy to help address relational challenges by fostering deeper emotional connections and understanding.
Pros and cons of investing in psychedelic stocks
Pros
- High growth potential: Psychedelics are emerging as a new frontier in mental health treatment. Early successes in clinical trials and increased societal acceptance could lead to significant growth in the sector;
- Untapped market: Given the increasing burden of mental health disorders globally and the limited efficacy of many current treatments, psychedelics might address a significant unmet need;
- Increasing legalization and decriminalization: Various jurisdictions are moving toward decriminalizing or legalizing the therapeutic use of psychedelics, which can potentially open up new markets;
- Diversification: Psychedelic stocks present a novel opportunity for investors looking to diversify their healthcare or biotech portfolios;
- Research and academic interest: Institutions like Johns Hopkins have opened centers dedicated to psychedelic research. This indicates a growing academic interest that could lead to breakthroughs and added legitimacy to the sector.
Cons
- Regulatory uncertainty: While there’s momentum towards decriminalization, psychedelics remain illegal in many jurisdictions, and shifts in political climate can affect the progress of legalization;
- Clinical trial risks: Like all drugs, there’s no guarantee that psychedelics currently in clinical trials will receive FDA approval or equivalent approvals in other countries;
- Public perception: Psychedelics have been stigmatized for decades. Changing public perception can be a slow process, which might affect the speed at which these treatments are adopted;
- Market volatility: As a relatively new sector, psychedelic stocks can be highly volatile;
- Penny stocks: Many psychedelic stocks, especially the newer entrants in the market, are classified as penny stocks, trading at very low prices. These stocks can be susceptible to market manipulation and may lack the rigorous financial reporting and transparency that come with larger, more established companies;
- Long road to profitability: Biotech companies often operate at a loss for several years as they invest in R&D and navigate the lengthy drug approval process. It might be a while before a company turns profitable;
- Competition: As the sector grows, there could be an influx of new players, potentially diluting market share for existing companies.
Conclusion
The potential of psychedelic therapies, underscored by promising research and a shift in societal attitudes, paints a bright future for the industry. However, as with all emerging markets, it comes with its set of uncertainties and risks, from regulatory hurdles to the volatility often associated with new sectors.
Thus, while the horizon seems promising, a cautious, well-informed strategy is essential for those looking to dive deep into the psychedelic stocks pool.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about the top 5 psychedelic stocks to buy in 2024
What are the top 5 psychedelic stocks to buy in 2024?
Notable players in the psychedelic substance field include Cybin, Seelos Therapeutics, GH Research, Compass Pathway, Numinus Wellness and Mind Medicine.
Where to buy psychedelic stocks?
You can invest in psychedelic stocks with regulated online brokers like Interactive Brokers and eToro.
What is the best psychedelic ETF?
One option is the Horizons Psychedelic Stock Index ETF (NEO: PSYK), which aims to provide exposure to North American publicly-listed life sciences companies having significant business activities in, or considerable exposure to, the psychedelics industry.
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