Is Investing in Shroom Stocks a Good Idea?

Psychedelics include psilocybin (the hallucinogen present in magic mushrooms), LSD, DMT, ayahuasca, ketamine and more. The term shroom stocks is slang for publicly traded companies involved in the research and development (R&D) of psychedelic compounds.

Psychedelic Stocks Hope to Treat Mental Health

The reason for the rise in popularity of shroom stocks is primarily their potential to treat poor mental health.

Mounting cases of depression, PTSD, anxiety, OCD, eating disorders and addictions have shone a light on the need to help those suffering. Furthermore, the COVID-19 pandemic compounded the mental health threat to society as loneliness and isolation exacerbated psychological struggles, and suicide rates soared.

Psychedelic therapies offer potential relief from many of these debilitating conditions. But as hallucinogenic drugs have been illegal since the 1960s, progress in researching their potential has been hampered. 

Thankfully this is beginning to change. Scientific start-ups are being granted permission to carry out research into specific compounds and psychedelic therapies. 

There are also rumblings of decriminalization as Oakland (California), Denver (Colorado), and Santa Cruz (California) became the first US cities to decriminalize magic mushrooms. It’s also widely believed that the recent acceptability of cannabis has eased wariness around the use of psychedelics.

Nevertheless, getting a Schedule I substance to a clinical trial is no mean feat. The regulatory and compliance hurdles are as hard as can be. But persistence seems to pay off, and the rise of psychedelic-themed start-ups ignites hope for a brighter future.

Click here for a list of popular shroom stocks and ETFs.

In 2018, Compass Pathways (NASDAQ: CMPS) received US Food and Drug Administration (FDA) approval of “breakthrough therapy” status for a psilocybin treatment they developed for treatment-resistant depression.

In the same year, the US FDA also approved SPRAVATO®, an esketamine nasal spray developed by Johnson and Johnson (NYSE: JNJ) for use in patients suffering from treatment-resistant depression. Esketamine is a chemical relation of the anesthetic and party drug ketamine. 

Then in 2019, Usona Institute received US FDA “breakthrough therapy” status for a psilocybin treatment for major depressive disorder (MDD).

Will the FDA approve psilocybin by 2030?

Of all psychedelic drugs, psilocybin is reported to have the most favorable safety profile. Therefore, it’s deemed the most likely to gain widespread approval. That approval process is likely to take a long time, but now the ball has started rolling, speculation abounds that the US FDA will approve psilocybin by the end of the decade, maybe sooner.

How Can Psychedelics Help Mental Health?

Psychedelics affect a person’s mental state by inducing hallucinations. The hallucination can be mild or deeply intense depending on the level of hallucinogen ingested. This can result in moments of clarity, self-awareness, and a change in…