How Analysts Are Asleep At The Wheel Regarding Psychedelic Stocks

TM Editors Note: This article discusses one or more penny stocks and/or microcaps. Such stocks are readily manipulated; do your own careful due diligence.

Psychedelic stocks remain in a trough in 2021 as Spring approaches. Share prices have wilted, not in response to any adverse news, but simply due to a lack of volume – much of it brought on by general weakness in the broader markets.

Compounding this issue, a number of additional public companies have commenced trading in this sector. So fewer retail investor dollars are being spread across a lot more stocks.

Rabid institutional interest in psychedelic drugs

Contrast this with the institutional interest in psychedelic stocks. Public companies (alone) have raised well in excess of US$400 million since Compass Pathways (US: CMPS) commenced trading in September 2020.

Even with the pullback in share prices (or possibly because of it?), institutional investors have continued to display a robust appetite for these pubcos.

Just in the past month, Field Trip Health (CAN: FTRP / US: FTRPF), Numinus Wellness (CAN: NUMI / US: LKYSF), and MindMed Inc (CAN: MMED / US: MMEDF) have announced over US$100 million in new bought-deal financings.

From an overall industry perspective, all of the news has been very positive. Announcements of psychedelics companies launching new mental health clinics or investing in existing facilities occur regularly. Updates on psychedelic drug research already in formal clinical trials indicate that this R&D remains on track.

Drug R&D is also rapidly branching into additional fields of medical research – with huge treatment markets. And IP development is becoming an increasingly important priority among these companies.

On the regulatory front, Oregon has legalized psilocybin for medicinal use and decriminalized other drugs. California recently proposed a state bill to legalize possession of several psychedelic drugs. Several other states are either moving toward a decriminalization vote or actively studying the issue. Canada (via Health Canada) continues to broaden access to the medicinal use of psilocybin at the national level.

On the commercial front, Red Light Holland (CAN: TRIP / US: TRUFF) has now legally imported its psilocybin truffles into both Brazil and Canada.

All of these individual developments compliment the Big Picture for this industry: potent drugs which represent the world’s best (only?) hope to address a Mental Health Crisis that already affects roughly 1 in 6 people on the planet.

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Disclosure: The writer holds shares in MindMed Inc, Numinus Wellness, Cybin Inc, and Mind Cure Health. Mind Cure Health is a client of Psychedelic Stock Watch.

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