Forget The Hype: The Psychedelic Stocks Sector Went Down In The Third Quarter Of 2021

We constantly read about the psychedelic stocks sector doing extremely well but, in fact, that is just not the case.

Depending on the average market capitalization of the stocks in the tracking index used, the sector went down between -9.7% and -12.1%, on average, during the last quarter (July through the end of September) and has gone down even further so far this month.


Here are the details:

59 clinical-stage psychedelic drug stocks researching the treatment of a variety of mental illnesses based on the use of 10 different psychedelic substances (read 10 Psychedelic Substances Now Being Researched By 36 Companies) now trade on North American stock exchanges.

Only 11 of the 59 companies have market capitalizations in excess of $50M ($577.3M on average) and they are tracked by the non-tradable munKNEE Pure-Play Psychedelic Compounds-Based Drug Stocks Index. It was DOWN -12.1% in the third quarter on an equally-weighted basis with 9 of the 11 stocks declining. The specifics are as follows, in descending order: 

  1. GH Resources (GHRS): +3.9%
  2. Cybin Inc. (CYBN): +3.3%
  3. Small Pharma (DMTTF): -8.3%
  4. Mydecine (MYCOF): -9.1%
  5. Seelos (SEEL): -14.5%
  6. Numinus (LKYSF): -16.2%
  7. Atai (ATAI): -18.0%
  8. Field Trip (FTRP): -18.5%
  9. Compass (CMPS): -19.5%
  10. Mind Medicine (MNMD): -31.7%
  11. Red Light (TRUFF): -46.7%

The non-tradable Psychedelic Market Leaders Index of 30 stocks has an average market cap of $240.1M and it was DOWN -10.2% during the last quarter while the non-tradable Psychedelic Invest Index, which tracks the performance of ALL 59 stocks in the sector (an average market capitalization of just $138.5M), was DOWN -9.7%.

The conclusion that can be drawn from the above statistics is that the nano-cap stocks (i.e. those with market caps of less than $50M) performed better than the larger cap psychedelic stocks and that, any way you look at the psychedelic stock sector, it went DOWN in the last quarter so forget the hype that the sector is doing amazingly well. It isn't.

Action Going Forward

While the above account is a grim reminder of how poorly psychedelic stocks have performed recently one could look at these declines as, perhaps, an opportunity to buy one or more of those stocks by doing some in-depth research as to which you think might hold considerable promise going forward. To that end, you are encouraged to click on the symbols of those stocks that are of interest and review their latest financial statements and commentary as found in the TalkMarkets data they have made available, and check out the company websites as provided there.

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