The emerging psychedelic drug industry is thriving.

It has attracted a multitude of high-profile investors. It’s drawing in large infusions of capital, both pubco funding and private equity. It’s receiving a steadily increasing volume of (favorable) coverage in the media.

Why?

Most of these drugs remain illegal – and have been for roughly a half-century. Until recently, they were relentlessly demonized as part of the (now-discredited) War on Drugs. In the United States, most are officially classified as having “no known medical use”.

The fact is that these drugs do have medical uses – particularly with respect to the treatment of mental health disorders. Medical science was well along the way to conclusively establishing these medicinal applications when these substances were criminalized.

As medical research on these substances has (belatedly) resumed, psychedelic drugs have been demonstrating amazing success rates in clinical studies. More on this later.

Prohibition of psychedelic drugs was a politically-driven policy, not science-backed.

When Timothy Leary exhorted people to “tune in, turn on, drop out” – via psychedelic drug use – this was too much for the political establishment of the 1960s.

Medical research on these substances was frozen. Meanwhile, the mental health conditions that these drugs were being tested to treat have spread rapidly – to epidemic proportions.

Today this is simply labeled the Mental Health Crisis.

A Crisis without an existing solution

Stress-related disorders like depression, anxiety, addiction, and PTSD affect over 1 billion people around the world. Yet psychedelic drugs may have remained banished forever by drug Prohibition except for one factor.

Mainstream medicine has been totally unable to cope with these stress-related conditions using existing drugs and therapies.

Psychedelic Stock Watch has previously pointed to these treatment failures.

With depression. See: Psychedelics: A Better Way To Treat Depression

With addiction. See: Are Psychedelics The Answer For Addiction?

The #1 reason why (in particular) depression and addiction have reached epidemic proportions around the world – a pandemic – is because of the failure of the medical establishment to provide even an adequate standard of care.

The entire global healthcare system has been mobilized to address the COVID-19 pandemic. But to date, only roughly 40 million people have been infected with COVID. For most, the symptoms are so mild they require no treatment.

Medical negligence in treating depression and addiction

Over 1 billion people suffer from clinical depression and addiction alone. Yet governments around the world have generally just stood around and watched this epidemic worsen.

The medical establishment is equally culpable. In the midst of this Crisis, Big Pharma has largely walked away from drug R&D for mental health conditions.

Multinational drug companies peddle their (so-called) antidepressants: addictive drugs whose efficacy is little better than sugar pills.

Physicians prescribe these hazardous drugs like two-legged Pez dispensers despite the fact that most of their “medicinal benefit” is nothing more than the Placebo Effect.

Witch doctor medicine.

In the United States, one in eight Americans 12 years of age and older are being prescribed these hazardous, addictive sugar pills. Giving them real sugar would be much safer and (for most patients) almost as effective.

Two out of three Americans exhibiting symptoms of depression don’t even seek treatment.

Is it any wonder? The only “cure” they are offered by the medical establishment is addictive, with a low rate of success and significant risks.

Meanwhile, drug addiction itself was a major crisis even before opioid use reached epidemic proportions – and became a crisis within a crisis.

Tobacco, with its addictive, toxic nicotine kills nearly 500,000 Americans each and every year. Yet existing “tobacco cessation” products are so ineffective that tobacco companies (cynically) invest in them.

Alcoholism is both a medical and social plague. Alcohol-related medical conditions are also a major killer. Yet the most common ‘treatment’ for alcohol addiction are so-called “twelve steps” programs that have no foundation in science.

More witch doctor medicine.

Addiction therapies for opioids and street drugs are somewhat more scientific – but no more effective.

Thanks to COVID-19 related stresses, rates of depression, anxiety, and addiction are soaring. A Crisis-without-a-solution is rapidly worsening.

The horrendous costs of the Mental Health Crisis

Our societies literally cannot afford the costs of this Crisis. Today 1 out of 7 people on the planet suffers from depression, anxiety, addiction, or post-traumatic stress disorder (PTSD) – and that ratio is falling rapidly.

Then there are the economic costs.

By 2018, the World Economic Forum estimated that these mental health conditions were costing the global economy $1 trillion per year from lost productivity alone. The Lancet Commission estimates that between now and 2030 these productivity losses will reach $16 trillion.

We couldn’t afford such economic losses even before the coronavirus pandemic crippled most of the world’s economies.

It is no longer acceptable for governments and the medical establishment to simply stand around and watch as the Mental Health Crisis deteriorates. Something has to be done.

Enter psychedelic drugs.

Potent drugs, real medicine, actual cures

While the mainstream medical profession continues its witch doctor medicine in treating depression and addiction, a growing army of medical scientists are hard at work on better treatment options – derived from psychedelic drugs.

A rapidly increasing body of psychedelic drug clinical research has produced a series of stunning results in major treatment markets where mainstream medicine is currently failing miserably. For depression. For addiction. For PTSD. See: Psychedelic Drugs: Powerful Medicine, Life-Changing Results

Psychedelic drug research is also forging ahead as a therapy in other major treatment markets such as acute pain, cluster headaches, Alzheimer’s disease, and bipolar disorder. See: Psychedelics Investing 101: Past and Current Psychedelic Drug Clinical Studies

Industry leader, Compass Pathways (US: CMPS) is in Phase 2 clinical trial using a psilocybin-based therapy for treatment-resistant depression. This research program has received Breakthrough Therapy Designation from the FDA to fast-track research.

Partly this fast-tracking was due to the urgent need for better therapies for depression. Partly this is because of the strong clinical results obtained by Compass to date. Partly it’s the fact that psilocybin has a benign safety/tolerance profile.

But the (lack of) toxicity of psychedelic drugs may be a somewhat moot point.

Mainstream medicine generally engages in serial (endless?) treatment sessions for mental health conditions like depression and addiction.

Addiction treatment is a $35 billion revolving-door industry in the United States. Treat, release, relapse, repeat.

With psychedelic drug clinical studies, therapies often cease after only a few sessions. Sometimes only one.

Why?

Because patients “ceased to exhibit clinical symptoms”. Another word for that is cure.

Major investment opportunity in psychedelic drugs

The need for psychedelic drug therapies in treating mental health conditions is both urgent and obvious.

The efficacy of psychedelic drugs in providing treatment solutions for depression, anxiety, addiction, PTSD, and other medical conditions appears close to clinical proof.

What is the final ingredient necessary to make psychedelic drug stocks a magnet for investors? Economic opportunity.

The numbers are here.

Statista pegged the treatment market for mental health services at $225 billion in 2019 – for the United States alone. A broader look at U.S. mental health treatment (by Harris Williams & Co.) estimates annual revenues of $300 billion.

The leading areas of research for psychedelic medicine, depression, anxiety, addiction, and PTSD, are all multi-billion-dollar markets individually.

With Big Pharma (conveniently) choosing not to make major commitments to these treatment markets, the playing field is virtually wide open for psychedelic drug companies. See: The 8 Best Reasons To Invest In Psychedelic Stocks

For decades, a Mental Health Crisis has relentlessly worsened because of an acute lack of effective treatment options. Today, with this Crisis now a full-fledged pandemic, hope has arrived.

Psychedelic drug research is emerging from the shadows and showing the clear potential to conquer this Crisis.

Investors have the opportunity to climb aboard the psychedelic drug bandwagon – as a host of multi-billion-dollar treatment markets beckon.