Investing in Shroom Stocks

By Kirsteen Mackay

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Shroom stocks are increasingly popular and the upside potential is huge. Here's an overview of the sector and a list of stocks available.

Interest in shroom stocks is growing as the vast potential for psychedelic therapies becomes apparent.

Shroom stocks is an informal term for publicly traded companies specializing in the research and development of psychedelic compounds.

Some of these are making synthetic psilocybin therapies, others sell medicinal herbs. They all share the goal of making psychedelics more acceptable in society.

The reason for the surge in interest is that these types of therapies have the potential to assist in reducing the severity of debilitating conditions. There’s a growing body of proof that psychedelic treatments can be effective in treating issues such as post-traumatic stress disorder (PTSD), depression, anxiety, eating disorders, and addictions.

With sub-par mental health becoming a widespread crisis, any kind of solution is welcome. That’s why shroom stocks are an increasingly popular investment opportunity.

A brief history of psychedelic compounds

Some historians believe magic mushrooms have been ingested since as long ago as 9000 BC. It’s also thought the hallucinations contributed to the craze of Vikings in battle.

Indeed, Central and South American Indians have long considered magic mushrooms sacred, referring to them as ‘flesh of the gods’.

It was the late fifties before they gained popularity in the West. After the magic mushroom was discovered in Mexico, scientist Albert Hofmann (who developed lysergic acid diethylamide (LSD) in 1938), studied the magic mushroom makeup to identify psilocybin as the key ingredient.

Psychedelic advocate Timothy Leary heard about it and quickly helped magic mushrooms become immersed in the hippie culture of the day.

In the late sixties, hallucinogens became illegal and were classed Schedule I drugs in 1970.

This legal strong-arm abruptly ended research and development into the benefits of these fascinating substances. Thankfully, things are beginning to change.

Progress in scientific research

The Schedule I status makes conducting FDA-approved scientific studies problematic but progress is being made.

It seems the scientific revival into psychedelic research has exploded in recent months but government authorities began taking an interest a few years ago.

The US Food and Drug Administration (FDA) deliberated a Breakthrough Therapy Designation to a psilocybin therapy for treatment-resistant depression in 2018. This is now being developed by COMPASS Pathways (NASDAQ: CMPS), a publicly traded company pursuing psychedelic therapies.

In 2019, the FDA recognized Usona Institute’s psilocybin therapy for major depressive disorder with the same Breakthrough Therapy Designation. This gives researchers scope to fast-track the discovery process of drugs showing early promise in treating serious conditions.

Meanwhile, in 2019, prominent medical research establishment, Johns Hopkins Medicine, launched the Center for Psychedelic and Consciousness Research. This was thanks to $17m in private funding from notable investors including Tim Ferriss.

Here they study hallucinogenic compounds like LSD and psilocybin and what part they can play in treating all manner of mental health disorders including anorexia, addiction, alcoholism, and depression. Hopkins researchers have long advocated for the reclassification of psilocybin to Schedule IV.

Furthermore, New York University (NYU) has reported an “immediate, substantial, and sustained” reduction in anxiety and depression in cancer patients.

Acceptability in motion

Oakland (California), Denver (Colorado), and Santa Cruz (California) are the first US cities to decriminalize magic mushrooms, while others are expected to follow.

It’s likely that the surge in acceptability of cannabis has helped spur this approval of psychedelics.

Even Big Pharma is taking an interest.

Johnson & Johnson (NYSE: JNJ) has released a prescription nasal spray for treatment-resistant depression called Spravato. Its key ingredient is ketamine, another hallucinogen. This is also approved by the FDA.

What is microdosing?

Microdosing means ingesting a minuscule amount of a psychedelic compound. It should be enough to improve mood, induce physical and mental stimulation, and encourage creative thinking without the subject ever hallucinating.

The practice has become popular over the past decade as reports of it being commonplace among Silicon Valley workers led the trend to spread. Now anyone from a stay-at-home mom to a company CEO could be microdosing to boost their creative juices.

There are concerns that the unsolicited practice of microdosing could lead to undetected problems. Thereby, making the need for further research and investment paramount.

Seamless background or border with fantasy alien magic mushroom forest, flat cartoon vector illustration on black background. Luminescent neon glowing landscape.

Investing in the blossoming psychedelic industry

As the research intensifies and acceptance spreads, the potential for wealth generation is substantial. Getting in early could mean considerable upside opportunity, but it also carries risk.

The legal barrier is a big one, while other risks include the usual lack of liquidity in small and micro-cap stocks that attract pump and dump scams.

Nevertheless, there’s a growing demand for solutions to mental health problems, which have been compounded by the pandemic. Indeed, the potential total addressable market (TAM) is huge.

Therefore, companies that make breakthroughs in this area are sure to attract vast sums of money from institutional investors.

While comparisons can be drawn with the cannabis market, the two are not the same. The strict regulatory environment around psychedelics makes the barrier to entry quite high so competition is less fierce.

The way psychedelic compounds are formulated is top secret and protected via intellectual property rights.

Also, while cannabis use is often daily and consistent, psychedelics are more likely to be administered on an occasional schedule with the view of short-term use.

List of Shroom Stocks

Most psychedelic companies are currently listed on Canadian stock exchanges. This can make it difficult to get exposure to the space.

Here are some of the popular shroom stocks operating today:

  • ATAI Life Sciences (NASDAQ: ATAI)

  • Compass Pathways (NASDAQ: CMPS)

  • MindMed (NASDAQ: MNMD)

  • Numinus Wellness (CVE: NUMI)

  • Cybin Inc. (NYSEAMERICAN: CYBN)

  • Mydecine Innovations Group (OTCMKTS: MYCOF)

  • Entheon Biomedical (CNSX: ENBI)

  • Hollister Biosciences (CNSX: HOLL)

  • Revive Therapeutics (CNSX: RVV)

  • New Wave Holdings (OTCMKTS: TRMNF)

  • Red Light Holland (CNSX: TRIP)

  • Field Trip Health, Inc. (CSE: FTRP)

  • HAVN Life Sciences (CSE: HAVN)

  • Champignon Brands Inc. (CSE: SHRM)

  • Mind Cure Health Inc. (CSE: MCUR)

  • Better Plant Sciences (CSE: PLNT)

  • Tryp Therapeutics (CSE: TRYP)

  • Aion Therapeutic (CSE: AION)

  • Lobe Sciences (CSE: LOBE)

  • PharmaTher (CSE: PHRM)

  • Ehave Inc (OTC: EHVVF)

  • Mindset Pharma (CSE: MSET)

  • M2BIO (OTC: WUHN)

  • Neonmind Biosciences (CSE: NEON)

  • Roadman Investments Corp. (TSXV: LITT)

  • PsyBio Therapeutics (TSXV: PSYB)

  • Bright Minds Biosciences (CSE: DRUG)

  • Silo Wellness (CSE: SILO)

  • Filament Health (OTCMKTS: FLHLF)

  • Small Pharma (CVE: DMT)

  • Novamind (CSE: NM)

  • Awakn Life Sciences (FRA: 954)

There are also ETFs

  • Horizons Psychedelic Stock Index ETF (NEO: PSYK)

  • Defiance Next Gen Altered Experience ETF (NYSE: PSY)

And here are some private companies operating in the space:

  • Beckley Psytech

  • Bexson Biomedical

  • CaaMTech

  • CB Therapeutics

  • Delix Therapeutics

  • Diamond Therapeutics

  • Earth Resonance

  • Eleusis

  • Gilgamesh Pharmaceutical

  • MagicMed Industries

  • MAPS Public Benefit Corporation (PBC)

  • Octarine Bio

  • Psilera Bioscience

  • Psygen

  • Tactogen

  • Universal Ibogaine

  • Wake Network

Interest is undoubtedly growing.

Netflix (NASDAQ: NFLX) has released several documentaries on the subject. Amazon (NASDAQ: AMZN) has produced a fictional miniseries with an all-star cast dabbling in psychedelics.

While, in the UK, the BBC produced a documentary called The Psychedelic Drug Trial, with Professor David Nutt of Imperial College, London.

Notable investors

Some notable investors are big advocates for investing in psychedelic therapies. These include:

Mike Novogratz: Billionaire investor Mike Novogratz is another fan and is invested in Compass Pathways.

Peter Thiel: Billionaire co-founder of PayPal and Palantir is invested in Compass Pathways and ATAI Life Sciences via his venture capital firm, Thiel Capital.

Tim Ferriss: The famous podcaster is a huge fan of psychedelic treatments and donated $1m to MAPS’ Capstone Challenge to finalize MDMA as medicine for PTSD.

Kevin O’Leary: Billionaire investor and Shark Tank host invested in MindMed’s $6.2m raise in September 2019.

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Topics:
Healthcare Services
Healthcare Supplies
Industries:
Healthcare
Companies:
Compass Pathways
Cybin
Tryp Therapeutics

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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