The Psychedelic industry is growing rapidly. This year I have invested in Psychedelic stocks, specifically Mind Medicine (MNMD) and COMPASS Pathways (CMPS). I understand the biotech sector is risky. The majority of drugs, like 90%, do not reach approval by the FDA. That being said, any successful investor needs to take at minimum a small measured risk in their portfolio. I believe these stocks or other companies in the psychedelic sector could potentially 10x before the end of the decade.

My thesis: Psychedelic treatments can be part of the solution for treating depression, PTSD, addiction, etc.

The idea of psychedelics being used to help with mental health therapy is not new. There are enough studies and research that show it can be viable. Kevin O’Leary, most famously known from Shark Tank laid out his opinion here. I pretty much agree with almost everything Kevin said. There seems to be a lot of institutional money flowing into the psychedelic sector. Whereas cannabis seems more focused on recreational use and politically charged, psychedelics are about medicine and science. If you google Psilocybin, Ketamine, or Psychedelics, see how the search results differ from Cannabis or Marijuana. Psychedelic news seems more concentrated whereas the latter is kind of all over the place.

What also makes psychedelics an attractive option, is its relatively low drug harm score, particularly, harm score towards others, even compared to cannabis. Given this information, I think the pathway towards legalization and marketization will be a lot easier than it has been for cannabis, thus removing the barriers to profitability.

Thesis #2 The need for psychedelic treatment is growing due to an emerging mental health epidemic.

The #1 domestic issue for America is health care, and that was even before the pandemic! Mental health is linked with health care, and a lot more people are suffering from anxiety and depression. This problem has only exasperated because of the pandemic. I think the vast majority of the population would agree with this, however, we do not have enough viable solutions being offered. Nowhere even close. This seems to be an issue we kind of just sweep under the rug until the next mass shooting happens. We talk about addressing it, and then….. nothing happens, repeat cycle.

My experience:

I have volunteered over 230 hours as a Crisis text Counselor in 2020. I had over 1,000 conversations with people seeking help. I can tell you from my experience, mental health is a problem and getting worse. Collectively as a nation, we are so woefully behind in finding viable solutions, the problem is likely to get worse than it is better. Consider that many people think mental health is not an actual medical problem, just a temporary weakness that shouldn’t even be discussed, not even among family members. Given how serious this issue is, I believe psychedelics as a whole, will eventually make up a big space in the biotech industry.

At some point, mental health will become too much of a problem to ignore and our government will have to throw a lot of money into addressing the issue just like they did Covid-19. A practical solution would be a commercial low-dose psychedelic prescription drug. I don’t anticipate this to be a very partisan issue. Demand for such a product is already high because the marketplace has such a low supply of viable solutions in treating mental health issues. As we have seen with vaccines lately, if the problem is big enough, and there is enough willpower, we can speed along the process in getting solutions out to the public.

In Conclusion:

I have used psychedelics in the past. So did Steve Jobs who said, “Doing LSD was one of the two or three most important things I have done in my life.” So did the founder of Alcoholics Anonymous Bill Wilson, who believed LSD could help treat alcoholism.

I don’t know how to put in words how psychedelics affected me or how I felt. Based on my experience I felt an altered form of consciousness. In a controlled safe setting I could see how it could help someone with mental health issues or addiction.

I am not a scientist. I am not a financial advisor. I know biotech companies are risky. These companies pretty much live on binary events. Based on my experiences and the scientific research that has been conducted, I think psychedelic stocks in general, have something worth investing in.

This story could take years to play out however as retail investors we have a major advantage over fund managers and analysts. We don’t have to focus on short-term profits. I am fully content having this section of my portfolio in the red before the actual story materializes. The research has merit and the problem is big enough that even a mediocre solution could cause this sector to expand dramatically.

We are still in the beginning stages of this journey. I am personally rooting for success in this industry and so should you. Mental health and addiction are such serious issues that have an extreme negative cost on our economy. It is such an overwhelming topic, we don’t even talk about it in depth because solving it seems impossible. In regards to an investment opportunity for me, this is a trip worth taking for the long run. I believe it will go from a speculative industry to a legitimate billion-dollar industry. Those companies on the forefront right now could reap major rewards.