Will Psychedelics Companies Win The Mental Health Boom?

Will Psychedelics Companies Win The Mental Health Boom?
Stéphane Renevier, CFA

almost 2 years ago1 min

If there’s one sector that’s received a huge influx of funding in 2021, it’s global mental health. That’s no surprise: the pandemic led to a significant increase in mental illnesses like anxiety and depression. In fact, 40% of American adults now report struggling with mental health or substance abuse. In response, companies have ramped up research and development to find new treatments. And that creates a market opportunity.

A promising area of new research is in psychedelics: that is, medication based on psychedelic substances like MDMA and LSD. After decades of legal log jams, decriminalization efforts are gaining ground, and research is booming as new startups enter the fast-growing sector almost every month. And sure, psychedelics stocks have taken a heavy beating over the past year – but with all the extra funding, things might be about to change.

One easy way to track companies involved in the research, development, and production of these treatments is via Psylocybin Alpha’s watchlist of publicly-traded psychedelics companies. If you prefer a more passive and diversified approach, a brand new psychedelic ETF has just hit the market: the Horizons ETFs’ North American Psychedelic Stock Index (ticker: PSYK). And don’t forget its two existing competitors: the AdvisorShares Psychedelics ETF (ticker: PSIL) and the Defiance Next Gen Altered Experience ETF (ticker: PSY).

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