How Long Until Psychedelic Stocks Payoff? | Psychedelic Spotlight

While researching a possible investment into psychedelic stocks, you have almost certainly heard the refrain of, “It’s a long term investment.” I myself, in my many videos for The Psychedelic Investor and articles for Psychedelic Spotlight, have probably said this over 100 times.

And while the thesis for investing in psychedelic stocks is appealing (read the full thesis here), having a timeline clearer than “it’s a long term investment” is necessary before deciding whether it is worth the risk.

In this article, therefore, I endeavor to answer a big question: “When will psychedelic stocks provide a significant return on investment?”

Or, translated to Reddit-speak: when moon?

To start, I feel it’s necessary to give the warning that the answer may be never. To be clear, while I personally believe in the potential for psychedelic stocks such as MindMed (Nasdaq: MNMD, NEO: MMED) and Cybin (NYSE: CYBN, NEO: CYBN), the entire psychedelic medicines industry is inherently speculative and there is no guarantee of success. Yes, the science right now suggests that treatments such as MDMA therapy for PTSD and Ketamine therapy for addiction will disrupt the mental healthcare market, but this needs to be confirmed in larger studies.

Plus, even if psychedelic medicines disrupt mental healthcare, there is no guarantee that any specific company will emerge as its leader. Therefore, to echo my previous articles, even if you believe in the industry, be prudent in your investments and don’t overexpose yourself to the volatile sector.

With that disclaimer out of the way, let’s hop into the heart of the matter.

There will be two separate turning points for psychedelic medicines and the companies that produce them: the legalization of the first psychedelic medicines, and the legalization of improved next-generation psychedelics.

The first will happen relatively soon. 

In the next two years, due to positive clinical data, it is likely that MDMA-assisted therapy to treat PTSD and psilocybin-assisted therapy to treat treatment-resistant depression will be legalized in the United States. According to Rick Doblin, founder and Executive Director of the nonprofit MAPS, MDMA for PTSD will likely come first, perhaps before the end of 2023. Then, a year or two later, psilocybin for depression will follow. Other classical psychedelics such as LSD and DMT will likely follow a year or two after that.

This will be a massive development for the millions of people who suffer from these ailments, as the success rates found in clinical trials for these treatments are much higher than classical treatments. 

From a business perspective, these legalizations will benefit two classes of psychedelic companies: clinics and producers. Clinics, since that is where people will be treated, and producers, as they will be creating the compounds. For example, Numinus Wellness (TSX: NUMI, OTC: NUMIF), should be well positioned as they both run their own clinics under…