Over the past few years, mental health has come to the forefront as a significant health issue, and regulatory agencies worldwide are increasingly becoming open to allowing large-scale human trials of solutions to the same through psychedelics and other similar treatments.
Until now, psychedelic drugs such as MDMA or magic mushrooms were considered serious illegal drugs. However, the FDA, the most significant drug regulatory body globally, recently approved psychedelics for large-scale human trials, designated it a breakthrough therapy, and encouraged researchers to drive innovation in the field. As research and investments in psychedelics increased over the past few years, their effectiveness in treating mental health conditions such as anxiety or depression is becoming clear.
Over the past decade, we have seen cannabis stocks explode and create billions in wealth on the back of legalization across various jurisdictions worldwide. Likewise, psychedelics such as Psilocybin, Ayahuasca and more are on the cusp of a similar breakthrough.
Certain parts of the US have already legalized certain psychedelics, like psilocybin, which Denver first legalized in Colorado in 2019, after which multiple jurisdictions and states legalized it. However, most legalizations have been of only plant and fungi-based psychedelics.
What's in the Article:
- Why Invest in Psychedelic Stocks in Canada?
- Canadian Psychedelic & Magic Mushroom Stocks
- The Psychedelics Industry Landscape in Canada
- Final Thoughts
Why Invest in Psychedelic Stocks in Canada?
Investing in psychedelics in Canada can be an intriguing opportunity for several reasons. Here are some key points to consider:
- Growing research and development: Canada has become a hub for psychedelic research and development in the mental health and wellness space. Leading research institutions are conducting groundbreaking clinical trials using psychedelics to treat conditions like end-of-life anxiety, addiction, and depression. The positive results from these studies and the potential for transformative treatments offer significant growth potential in the psychedelics industry.
- Expanding market opportunities: Psychedelic medicines have shown promising efficacy in treating various mental health disorders, surpassing traditional treatment methods in some cases. As the demand for alternative mental health treatments continues to rise, companies have tremendous room to grow in both the medicinal and personal use spaces.
- Favourable regulatory environment: Canada has taken progressive steps towards psychedelic medicine, with approvals for the therapeutic use of psilocybin in specific contexts. This regulatory openness provides a supportive framework for research, clinical trials, and the development of psychedelic-assisted therapies. As regulations evolve, the industry has the potential to expand further.
- Innovative technologies and partnerships: Canadian psychedelic companies leverage innovative technologies to advance their research and development efforts. Collaborations with medical tech companies enable the measurement of brain activity after dosing, enhancing the understanding of psychedelic effects and treatment outcomes. These technological advancements contribute to the growth and effectiveness of psychedelic medicines.
- Market correction and valuation: The psychedelic industry experienced a period of high valuation in 2021, followed by a market correction that brought valuations back to more standard early-stage levels. This correction presents an opportunity for investors to enter the market at potentially more favourable valuations, offering a chance for long-term growth as the industry continues to evolve.
While investing in psychedelics in Canada can offer significant growth potential, it’s essential to consider the risks involved, such as regulatory uncertainties and the early-stage nature of the industry.
Canadian Psychedelic & Magic Mushroom Stocks
Many companies in the list below research formulations are based on psilocybin, a hallucinogen in magic mushrooms.
Here are some of the best psychedelic stocks to invest in –
Mind Medicine (NEO: MMED.NE)
Market Capitalization – C$169 million
Mind Medicine is a Canadian medical technology and drug development company developing its drug discovery software and psychedelics. The company recently announced encouraging results of a drug combined with MDMA and LSD to boost mental performance.
Mind Medicine acquired HealthNode, a machine-learning startup that uses AI to accelerate drug development. The company also partners with Nextage Therapeutics to develop innovative drug-delivery products.
The company’s ability to secure partnerships and collaborations with renowned research institutions further strengthens its market position and research capabilities. In addition, these partnerships contribute to the company’s innovative pipeline of potential therapies, which include treatments for mental health disorders such as anxiety, depression, and addiction.
With its ongoing clinical trials and successful fundraising efforts, Mind Medicine is well-positioned for growth in the psychedelics sector. The company’s commitment to scientific rigour and innovation, along with its strong financial performance, indicate its potential for success in developing and commercializing psychedelic medicines.
Furthermore, recent regulatory advancements, such as Canada’s approval of the therapeutic use of psilocybin, provide growth prospects for Mind Medicine. Finally, as societal attitudes towards psychedelic medicine continue to evolve, the demand for alternative mental health treatments is expected to increase.
Numinus Wellness (TSX: NUMI)
Market Capitalization – C$41 million
Numinus Wellness is a psychedelic drug development and mental health therapy company. The company has four main branches, the first being drug development, in which the company researches and develops psychedelic compounds based on those found in magic mushrooms; the second is psychotherapy, where the company uses psychedelics such as psilocybin/LSD/MDMA/etc. to treat health issues like anxiety, depression, eating disorders, substance abuse, etc., the third is psychedelic integration, where the company uses its expertise to consult those with issues such as those mentioned above on the use of psychedelic treatments. Finally, the fourth is ketamine therapy to treat various mental health disorders.
The company also acquired MindSpace Psychology services early this year to build a network of physical wellness centers across North America. In addition, Numinus held a license for the possession, sale, testing, and distribution of psychedelics from Health Canada and was the first company from its sector to be granted regulatory approval.
In FY20, the company reported C$881K in revenue (up 719% YoY) and a net loss of C$9.6M (down 32% YoY). In Q2’21, the company reported revenue of C$562K (up 159% YoY) and a net loss of C$4.82 million (down 44.93% YoY). As the company is still in R&D, no meaningful operating financials are available at the moment. The company has cash on hand of C$63.23 million. Numinus has returned a 100% for investors over the past year.
Cybin (NEO: CYBN)
Market Capitalization – C$74 million
Cybin is a Toronto-headquartered psychedelic drug development company that uses technologies such as AI to make drug discovery more efficient and effective. Cybin has a three-pillar strategy that involves advanced drug discovery, disruptive drug delivery, and the creation of overall mental health experiences by establishing wellness centers. The company has four drugs in its pipeline that target health issues such as depression, eating disorders, anxiety disorders, and alcohol abuse. The drugs are mainly in pre-clinical stages or phase 1/2. The company aims to administer medications through films or inhalations.
The company partners with industry leaders to lead neurology software, establish health wellness centers, and develop drugs. For example, its partnership with med-tech company Kernel will allow it to use advanced medical machinery to measure brain activity in a highly granular manner post-administration of the drug being tested. As a result, the stock returned 224% for investors in 12 months.
The company has a diverse pipeline of products in various stages of development and has made substantial progress in clinical trials. With successful fundraising efforts and strategic partnerships, Cybin’s financial performance has been promising. In addition, the company has a strong market position, leveraging its proprietary drug delivery platform and strategic collaborations with leading research institutions.
Red Light Holland Corp. (TRIP.CN)
Red Light Holland is a company that focuses on producing, distributing, and selling magic truffles, which contain psilocybin. The company has a unique market position as it operates in the recreational market, targeting responsible adult use of magic truffles. Red Light Holland has shown promising financial performance, with revenue growth and successful branding efforts.
The company’s growth potential lies in its strategic partnerships and expansion plans into international markets. Red Light Holland aims to educate and destigmatize psychedelic substances while providing quality products to its target demographic. With the increasing interest in recreational psychedelics and the potential for regulatory changes, Red Light Holland has an opportunity for growth in the current year.
Mydecine Innovations Group Inc. (MYCO.NEO)
Mydecine Innovations Group is a biopharmaceutical company focused on researching, developing, and producing novel psychedelic-assisted therapies. The company aims to address mental health disorders using naturally occurring psychedelic compounds. Mydecine has shown promising financial performance, with successful financing activities and strategic partnerships with other pharmaceutical companies in Canada.
It’s research collaborations and commitment to scientific excellence strengthen the company’s market position. Mydecine has a diverse pipeline of therapeutic candidates and is actively pursuing clinical trials. With the growing interest in psychedelic medicines and the company’s research-driven approach, Mydecine Innovations Group has strong growth potential in the current year.
Nova Mentis Life Science Corp. (NOVA.CN)
Nova Mentis Life Science is a biotechnology company in Canada focused on researching and developing therapies for neurological and psychiatric disorders, including those related to the gut-brain axis. In addition, the company is investigating the potential of psychedelic compounds, such as psilocybin, in addressing these disorders. Nova Mentis has made progress in pre-clinical research and has shown promising financial performance, including successful fundraising activities.
Its unique focus on the gut-brain axis and its proprietary research platform strengthen the company’s market position. In addition, Nova Mentis is actively advancing its scientific understanding and aims to develop effective treatments for mental health conditions. With the growing recognition of the gut-brain connection and the company’s specialized approach, Nova Mentis Life Science has considerable growth potential in the current year.
PharmaTher Inc. (CSE: PHRM)
Market Capitalization – C$10.9 million
PharmaTher is a Canadian drug development company engaged in psychedelic drug development for treating depression. In June this year, the company announced that it had applied to the FDA for preliminary approval of its Ketabet drug, a derivative of ketamine.
The company claims that its drug can be an effective depression treatment. PharmaTher also has a prolific pipeline of ketamine derivatives to treat ALS and Parkinson’s Disease, the former in the pre-clinical stage and the latter in Phase 1&2.
However, what is interesting is the company’s under-development microneedle patch drug delivery system, which people can use to administer many psychedelic drugs from PharmaTher or any other medication from other companies painless.
It has entered into partnerships and collaborations to advance its research, including collaborating with the University of Calgary to develop ketamine-based therapies. These partnerships contribute to PharmaTher’s scientific credibility and research capabilities, positioning the company for potential growth in the psychedelic medicine sector.
Moreover, PharmaTher has been actively expanding its intellectual property portfolio by filing patent applications for its novel drug formulations. Intellectual property protection can provide the company with a competitive advantage and potential revenue streams in the future.
Since the company is still in the development phase, no operating financials are available at this moment. However, PharmaTher has maintained a consistent valuation since the overbought times of 2021.
Compass Pathways (NASDAQ: CMPS)
Market Capitalization – C$384 million
Compass Pathways is a research-focused psychedelic drug development company focused on psilocybin. Compass is one of the largest companies in the psychedelic sector in terms of market capitalization. In addition, the company is engaged in thorough human trials across hundreds of patients across multiple continents.
The company is primarily engaged in R&D and has not commercialized any products. However, digging more into its R&D, the company is carrying out the most extensive human trials for a specific type of depression, treatment-resistant depression, which is a health disorder in which patients are non-responsive to at least two types of medications or treatments; these patients represent a massive market of 100 million patients with unmet medical needs. The company’s clinical trials included 216 patients across 22 diverse jurisdictions.
Compass has multiple fruitful partnerships that augment its research capabilities; for example, its partnership with Mindstrong helps leverage its digital biomarker technology for deep research. The company also has a psychedelic therapy training program for psychiatric professionals, which it can monetize later, and is a differentiating factor between this and other companies. Last quarter, the company acquired an intellectual property portfolio of psychedelic compounds developed with a partner; the deal’s price was undisclosed.
Seelos Therapeutics, Inc. (NASDAQ: SEEL)
Market Capitalization – $129 million
Seelos Therapeutics is a psychedelic drug discovery headquartered in Nevada. The company aims to address serious health issues like ALS, ASIB (Acute Suicidal Ideation Behaviour), PTSD (Post Traumatic Stress Disorder), Parkinson’s Disease, Asthma, and other more common disorders like anxiety and depression, etc.
The company has a pipeline of 4 treatments – ketamine, gene therapy, trelahose, and peptidic inhibitor. Their ketamine drug is aimed at treating ASIB, PTSD, and depression. Seelos’ gene therapy treatment aims to treat Parkinson’s, muscular and spinal atrophy, etc. Finally, Trelahose aims to treat ALS, and its peptidic inhibitor is also for Parkinson’s.
The Psychedelics Industry Landscape in Canada
Canada’s psychedelics and magic mushrooms industry has experienced significant growth and regulatory advancements in recent years. In 2020, Canada became the first G7 country to legalize the therapeutic use of psilocybin, paving the way for research, clinical trials, and expanded access to psychedelic-assisted therapies. This progressive regulatory framework has created a favourable environment for the industry to flourish.
Numerous research institutions and companies in Canada are actively exploring the therapeutic potential of psychedelics and magic mushrooms for various mental health disorders, including depression, anxiety, PTSD, and addiction. These studies aim to provide scientific evidence for the efficacy and safety of these treatments, further validating their use in the medical field.
Investor interest in the psychedelics industry has increased, leading to increased funding and capital infusion into psychedelic-focused companies. In addition, the belief in the growth potential and the positive impact of psychedelic medicine on mental health treatment has attracted significant attention from investors.
The public perception of psychedelics and magic mushrooms has also transformed, with growing awareness and acceptance of their potential benefits. This shift in perception has generated increased demand for alternative mental health treatments and created a receptive market for companies operating in the psychedelics and magic mushrooms industry.
The industry can be divided into various sub-sectors, including biotech companies engaged in research, development, and commercialization of psychedelic-assisted therapies; clinic operators providing specialized environments for therapy sessions; drug manufacturers ensuring quality control and compliance with regulations; retail and distribution businesses offering legal psychedelic products for responsible adult use; and research organizations dedicated to advancing the scientific understanding and applications of psychedelic compounds.
Canada’s psychedelics and magic mushrooms industry is poised for significant growth, driven by progressive regulations, ongoing research, investor interest, and increasing public acceptance. In addition, the industry’s potential to revolutionize mental health treatment makes it an exciting and dynamic sector to watch.
The biggest mental health issue globally is depression, which affects north of 250 million people across the globe. Depression has been heavily exacerbated since social media went mainstream, as seen by the doubling of teenage depression rates in the United States. Further, the onset of the pandemic made things worse due to the effects of lockdowns or social distancing.
With increasing social media use and distance working, cases of depression and anxiety will move upwards, unfortunately. However, you can see the market making these products available, with many places to buy psychedelics online in Canada. Further, increased R&D in psychedelics can result in better and more effective drugs, boosting usage and growing legalizations. These factors collectively make psychedelics a desirable sector to invest in, especially when considering the massive wealth creation that the similar cannabis sector has seen in the past few years.